Investing rule: Don't predict, do this instead (11 9 25)

Advertisement

Turn on the news, and you'll hear "experts" confidently forecasting a market crash, a looming recession, or the next big boom. It's easy to think that predicting the future is the only way to invest successfully. But what if the smartest investors in history told you that prediction is a fool's errand? Today we’ll explain why you should stop trying to predict — and what you should do instead.

Here’s what we’re covering in today’s Clark Smart Investing newsletter:

• Stop trying to predict the market (legendary investors agree)

• 6 things you'll spend more on than you think in retirement

• Pension vs. lump sum: The 6% rule you need to know

• Nerd alert: What are covered calls and why is everyone talking about them right now?

• Q&A: What’s the best option for a “fun” account?

• Smart money move of the week: Easy way to find free money

💵 You Can't Predict the Market. Here's How to Still Win.

The smartest investors in history all agree: Trying to forecast the economy or time the market rarely works. Here's why you should focus on preparation instead of prediction.

The investing world is filled with predictions. Turn on any financial news channel and you'll hear experts confidently forecasting where the market is headed next. Check your social media feed and you'll see people claiming they called the latest market move.

It all makes prediction seem possible, even necessary.

But here's what three of the most successful investors in history want you to know: Market prediction is a fool's errand, and you don't need it to succeed.

In the full article, find out what three legendary investors Howard Marks, Peter Lynch and Jack Bogle all have in common, why prediction feels possible (and several examples that show it’s not), and what you should do instead to be a successful investor.

📚️ Recommended Reading

✅ Poll: What’s Your Take?

Every week, we'll ask a new question to get your take on the latest financial trends and topics.

Last Week’s Poll Results

We asked: “Do you think $1 million is enough for you to retire comfortably?” Here’s how you answered:

• Yes: 48%

• No: 52%

💬 Ask an Advisor

In this recurring Q&A, we share questions that have been answered by Clark Howard or Wes Moss on the podcast. Submit your question today!

Maggie in Alabama: My husband and I (both 28) have what we believe is a good foundation of maxed Roth retirement accounts, as well as a HYSA with six months of an emergency fund, and a general brokerage account. What is my best option for some safe growth for a “fun” account? I want money to grow but don’t want this account to take on too much volatility or be locked up for any period of time.

Wes Moss says: This is fundamentally a time horizon question, and it's very common. Many families create separate "buckets" for specific costs, with a vacation account being the number one I see. However, the reality is that when you put money aside for a vacation, you're likely going to spend it that year or the next, meaning your time horizon is very short. When the time frame is that short, you absolutely should not be investing that money in stocks. You're already using the right vehicle: the High-Yield Savings Account (HYSA). You must keep one-to-two-year money in something short-term and safe. The last thing you want is to plan a specific-cost vacation, like a family cruise, and then have your entire vacation account be down 20% because the market is in a correction. It's a bad practice to think you can put money in a stock account and expect it to be whole a year from now.

💸 Money Tip of the Week

☎️ Need Money Help?

The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information.

This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Any company names shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.

Advertisement

Team Clark uses beehiiv to create and send our newsletters.