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Happy New Year, everyone! I hope the beginning of 2016 finds you looking optimistically at the year ahead. There is something very encouraging about a new year and how we tend to look at it as the start of something better for ourselves. As Time Magazine reported in their list of the most Googled resolutions of 2015, last year found us looking for less stress, better health and more enjoyable work (and strangely, the perfect recipe for kale chips which came in as the second most searched term).

This time of year also brings with it a slew of predictions for what will happen in the economy and the stock market. Fox Business says the U.S. Market will be up 5% this year, Goldman Sachs by way of Fortune Magazine is predicting flat market growth for the S&P and CNBC reports at least one expectation of a major bear market drop of about 20%. There are equally contradictory forecasts on inflation, dollar strength and just about every economic measure about which one can opine.

While these kinds of predictions can be tempting to hold on to, especially as the Dow drops nearly 300 points in its first trading day of 2016, it’s important to realize no one has a crystal ball for what will happen tomorrow, let alone the next 365 days. For the sake of illustrating this point, I’ve gone back to see what some of the experts were projecting a year ago, now that we can compare it to what happened in 2015.

U.S. Markets

Kiplinger: “We expect broad U.S. stock market indices to rise by high-single-digit percentages…up some 9% from recent levels”

CNBC: “The average 2015 forecast of 15 top Wall Street strategists is for a roughly 7.5 percent gain in the S&P”

CNN: “Investing pros surveyed by CNNMoney expect the S&P 500 to climb…8% from Friday’s close.”

Wall Street Journal: “…see the S&P 500 rising 8.2% this year”

What really happened: The S&P 500 Index was down a little less than 1%

International Markets

CNBC: “…potential market volatility around growth scares in China or Europe”

CNN: “…there are a variety of risks…in Japan, a hard landing in China, or a worse-than-expected slowdown in Europe”

Kiplinger: “Europe’s woes will create some compelling bargains”

What really happened: Developed international countries were down about 3% while emerging markets including China were down sharply.

Oil Prices

CNN: “Strategists polled by CNNMoney expect crude oil to bounce back from current levels and end next year at about $74 a barrel.”

CNBC: “…analysts expect prices to be higher in the second half of 2015”

Kiplinger: “…oil could dip as low as $75 per barrel…edging back up to $85 to $90 early in 2015.”

What really happened: The price per barrel of oil started 2015 around $53 and ended at roughly $37.

The speculation went on and on, as it is sure to this year as well. Media outlets will ask the experts for their estimations and some will be right and others will be wrong. Of course, they don’t report these predictions in the editorial column. They are served to us as advice, which usually elicits us to take some sort of action. “The market is overpriced – sell now.” “Commodities are cheap – get in at the bottom.” “China is headed for disaster – put all your money in the U.S.” We naturally wind up feeling like we’d be remiss not to take action; either we’re going to miss an opportunity or get leveled by a threat. We believe we must do something now to prepare for what’s next.

To prepare for the future, we can choose to believe the speculators. Of course, the voices telling us what comes next rarely agree and as we’ve seen with 2015, they aren’t always right. The alternative is to prepare for the future by looking to the past. This is what the past tells us about investing in today’s unpredictable world economy:

  1. There is no indication that anyone has been able to foresee future economic and market conditions on a consistent basis.
  2. Investors who have taken action based on headlines and predictions have historically been worse off than if they just bought and held the broad market.
  3. Individuals are better off when they have a long-term strategy that is built to endure a variety of current conditions.
  4. The decisions we can control like the expenses in our portfolios, how much we spend and how much we save will likely have a far greater impact on our plan than whatever happens in the stock market in any 365 day period.

Much like any other resolution you make in 2016, the goal isn’t to make it work for the next year alone. We don’t want lower stress, better health or more fulfilling work temporarily and success in these areas doesn’t come from changing our diets or our jobs every 12 months. Real results come from building a strategy that will endure over time and by making choices that align with our long-term goals. That will remain true of your financial plan no matter what the market does this year or which one of the experts gets to say a year from now “I told you so”.