Beware Of The Financial Soothsayers

Beware Of The Financial Soothsayers

Happy New Year to all our clients!

This time of the year resolutions abound until broken and also city forecasts on how the FTSE 100 will perform. These have almost invariably been bullish in the past and mostly wrong so they come with a wealth warning!

The FTSE 100 closed on the 31st December 2014 at 6,566, 2.7% lower than its 31st December 2013 closure of 6,749. So how did this performance stack up with the predictions for 2014? Here are some leading fund house views, most of whom were expecting at least for the index to advance 3% to an all time high (current high 6,930 reached in December 1999!): –





Capital Economics


Old Mutual




Brewin Dolphin


Credit Suisse


Legal & General


And so on!

So what about 2015? Most forecasters believe this year the record will finally be broken but are much more guarded than before. However, Citicorps (they of the 8,000 2014 forecast) are predicting 7,700! One of the highest of the others is Credit Suisse at 7,300 while Morgan Stanley and Goldman Sachs have predicted 7,200 and 7,100 respectively. Most centre around the 7,000 level but Rathbones have a doom and gloom forecast of 6,250, nearly 5% lower over the year!

Despite the vast amount of data available to analysts the experts, of course, have no real idea and it’s just a bit of seasonal knock about fun making the predictions. So what chance have mere mortals (investors and IFAs) with their guesses, er I mean forecasts?!

Watch out because  there are stockmarket headwinds around not least the political uncertainty of an election in May. So get ready for what should be an interesting if not bumpy ride!