The stock market is surprising everyone with its pandemic-defying performance in 2021. With just two trading days left until the end of the year, the Standard & Poorâ€™s 500 stock market index, with dividends reinvested, has returned a spectacular 27.4% in 2021!
Who could have predicted it amid the pandemic? Not Wall Streetâ€™s best minds!
On December 21, 2020, Barronâ€™s published an article in which they asked 10 leading Wall Street strategists to predict the closing price of the S&P 500 on December 31, 2021.
The S&P 500 closed 2020 at 3756 and the mean forecast of the 10 strategists was for the S&P 500 to close 2021 at 4040, about an 8% gain. The strategistsâ€™ consensus is not even close to the 27.4% gained through the end of today, December 28, 2021.
In this chart, each black line represents the consensus forecast of the 10 strategists published in Barronâ€™s annually since 2008. If the Wall Street strategistsâ€™ annual forecasts had been correct, the dots would fall right on the red line representing the S&P 500, but they usually are not even close.
Although Wall Street strategistsâ€™ forecasts have been consistently unreliable since 2008, 2021 illustrates just how wrong the largest brokerage firms can be. Itâ€™s reason No. 9 to trust our advice: We are independent of the Wall Street sales machine.
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