Sound Advice: December 24, 2025

Sound Advice: January 3, 2025

2025 Market Forecasts: Stupidity Taken To An Extreme If you know anything about stock market performance, you can only gag at the nonsense “esteemed forecasters” are now putting forth about the prospective path of stocks in the year ahead. Our cousins in the UK would call this rubbish. I would not be as kind. Leading the Ship of Fools is the forecast from the Chief Investment Strategist at Oppenheimer who is looking for a year-end 2025 level for the Standard & Poor’s Index of 7,100, a whopping 21% increase from the most recent standing. Indeed, most of these folks are looking for double-digit gains. Only two expect stocks to weaken. In the last 30 years, the market has risen by more than 20% only 15 times. The exceptional span during that time was 1996-1999, which accounted for four of those jumps. What followed in 2000 through 2002 was the polar opposite: 2000: -9.1% 2001: -11.9% ...

Sound Advice: January 15, 2025

Why investors shouldn't pay attention to Wall Street forecasts Investors shouldn't pay attention to Wall Street forecasts for several compelling reasons: Poor accuracy Wall Street forecasts have a terrible track record of accuracy. Studies show that their predictions are often no better than random chance, with accuracy rates as low as 47% Some prominent analysts even perform worse, with accuracy ratings as low as 35% Consistent overestimation Analysts consistently overestimate earnings growth, predicting 10-12% annual growth when the reality is closer to 6%. This overoptimism can lead investors to make overly aggressive bets in the market. Inability to predict unpredictable events The stock market is influenced by numerous unpredictable factors, including geopolitical events, technological changes, and company-specific news. Anal...

Sound Advice: July 16, 2025

Fixed annuities are poor investments Fixed annuities are often criticized as poor investments for several reasons, despite their reputation for providing stable, predictable income. Here are the key drawbacks and concerns: High Fees and Commissions Internal Fees: Fixed annuities can carry a range of fees, including administrative charges, mortality expense risk fees, and rider fees. These can add up to 2%–4% per year, significantly eroding returns over time. Commissions: Sales agents and financial advisors often receive high commissions for selling annuities—sometimes as much as 5%–8% of the invested amount. This creates a financial incentive for advisers to recommend them, even when they may not be the best fit for the client. Comparison to Other Investments: Mutual funds and ETFs typically have much lower fees and commissions, making them more cost-effective for long-term growth. Limited Growth a...

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