Behavioural finance: Why conventional wisdom has been surprised this year

Hopefully, you do not need me to tell you about the perils of forecasting. The year so far has provided a clear example of how we, as human beings, can be both perpetually overconfident in our ability to forecast and just as perpetually surprised by our failure to do so effectively. It has also shown how key assumptions can be lazily constructed without much actual thought. The mania of the investment industry for year-ahead predictions does serve one useful function: it provides an opportunity to assess the general mood and opinions of a broad section of the market. At the end of ...