We try and try, but the results are always the same. We are not good forecasters. Should we stop trying to predict? That would be the obvious answer, yet anyone who invests needs to make assumptions, which are forecasts. The easy answer is to diversify, but there are assumptions about what may happen in the future. The classic 60/40 stock/bond mix will not last forever.
Turn the loser's game into one where you can limit downside. Provide ranges and not point forecasts. The key is knowing your limitations when it comes to forecasting. If you are likely to be wrong, think in terms of probabilities. Think about the impact of being wrong and how much exposure you would like to have.
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