Revisiting Professional Investors' Stock Market and Economic Predictions for 2010

by: Value Expectations

With 2010 nearing its end, it is a good time to revisit some of the predictions that were made by the participants of our professional investment survey The Market Forecast Project (MFP) at the beginning of the year to see how some of them turned out.

The MFP survey was designed to provide investors an inside perspective into the minds of a large group of financial professionals to gain an edge via participation on important topics and stock picking. Those who participate receive the results as well as some of the favorite stock picks (long/short) from the pros before they are released to the media. The questions on this survey shine a light on professional investor opinions on everything from the state of the markets and economy, political events, commodity prices and timely events in the world of finance.

Past MFP surveys have proven to be quite accurate at predicting outcomes of future events such as gold and oil price movements, political events and other events that affected the markets. Let’s see if the participants in our survey brought out the wisdom of the crowds or if they fell victim to groupthink.

Question 1

Prediction: The majority of respondents predicted that U.S. GDP would be better than 2.5%.

Result: YTD GDP has grown around 3%

Question 2

Prediction: 64% of MFP participants predicted the price of gold to rise in 2010.

Result: The price of gold is up 25% YTD

Question 3

Prediction: 71% expected a moderate rise in price of oil in 2010

Result: The price of oil is up 9% YTD

Question 4

Prediction: 70% expected Large Caps to outperform their smaller brethren.

Result: The Russell 2000 has returned 14% YTD compared to the 6.5% returned by the S&P 500

Question 5

Prediction: 63% predicted mild appreciation against the Euro

Result: The USD/Euro ratio is currently $1.31 USD/Euro, USD did slightly appreciate against the Euro

Question 6

Prediction: Most predicted interest rates to reach 4.5%

Result: Current yield rate is 2.84%

Question 7

Predictions & Result:

Question 8

Prediction: Investors predicted that Brazil would be the top performing BRIC followed by India then China and Russia

Result:

Question 9

Prediction: Technology and Health Care were favorites amongst investors and Consumer and Capital Goods were least favored.

Result:

Question 10

Prediction: Most predicted a moderate rise in US equities in 2010.

Result: U.S. equities as represented by the ETF TMW has returned around 9% YTD

Question 11

Prediction: Investors predicted that Democrats would maintain the majority in the Senate.

Result: Democrats still hold the majority in the Senate 52 to 48.

Question 12

Prediction: Investors predicted that Democrats would maintain the majority in the House.

Result: Republicans now have a majority in the House at 242 seats to the Democrats’ 192