On February 8th of 2024, the Wall Street Journal gave you a gift. You might not realize it, but I'm going to encourage you to go out and collect this gift: an article titled "Investors Are Almost Always Wrong About the Fed". This article, although it's important in what it says about the Fed and about how investors (institutional or otherwise) react and make predictions, it's a spectacular tool about predictions in general. So when investors or clients come to you, and they've heard some outlandish thing, and they're asking you if they should pull all their money out of the market, or if they should put all their money into Bitcoin, or whatever is kind of pulling at their emotions, or their greed/fear factor, and they're starting to point down an outlandish path that you as a financial advisor know you need to bring them off of... hang on to this article.
Again, it's about the Federal Reserve. It's about inflation, and the predictions that people (professionals, economists, asset managers) are making on what the Federal Reserve will do next with interest rates. But my contention here is that it's really more about the poor predictive qualities that we as humans have when it comes to identifying such things. When you compare what has actually happened, going all the way back prior to 2005, to the predictions that people have made, the overall consensus of where things were going to go didn't go there. Now yes, periodically, the predictions are correct. But most often, the predictions are incorrect.
Turn this into an exploratory piece or an explanation about the lack of the ability for people to properly predict where things are going. And I think you can bring some rationalization and some logic pattern back into certain clients. And that's not going to work for everybody. But for certain clients, it will be a home run with them - they will totally understand the point that you're being making, and it's a historically accurate point, as published in The Wall Street Journal. Now, go collect your gift.
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