OTHER VOICES

Mark Hulbert's been around awhile, tracking performance of newsletter writers. Here's an interesting piece from MarketWatch today about what the 2016 stock market might do.

It notes some of the pitfalls some investors fall prey to, past is not prologue, but more likely, to use a Zen idea, the market in any given year is what it is.

CHAPEL HILL, N.C. (MarketWatch) — There’s a 66.1% chance that the U.S. stock market will rise in 2016.

If you’re like most investors, you’re encouraged by those odds. After all, the current bull market can’t last forever, and, depending on how you count it, it’s already one of the longest in U.S. stock market history.

In fact, the odds of the stock market rising next year would be the same even if we currently were in a bear market. That’s because the market’s odds of rising in a given year have nothing to do with how it does in prior years. Historically, those odds have been very close to two out of three.

Investors who find this result hard to fathom are guilty of what statisticians call the “gambler’s fallacy.” A common instance of this fallacy comes when we think that, after a coin comes up heads in six consecutive coin flips, there are better-than-even odds that the next flip will be tails. A coin, of course, doesn’t remember whether its previous flip came out heads or tails, so the odds are 50-50.

The situation that applies to the stock market is remarkably similar. More;

marketwatch.com/story/here-are-the-odds-that-us-stocks-will-rise-in-2016-2015-12-08