We hope this letter finds you and your family well and that you are able to enjoy time together during the holiday season.

This month, rather than sharing our own reflections, we’d like to pass along an article that resonated deeply with us — written by Mitch Zacks, CEO and Senior Portfolio Manager at Zacks Investment Management. His words reaffirm a principle we hold dear: successful investing depends more on patience and discipline than bold predictions.

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**Why Bold Market Predictions Rarely Pan Out**
By Mitch Zacks

In 1999, James Glassman and Kevin Hassett wrote *Dow 36,000*, forecasting that the Dow Jones would nearly triple “immediately.” But the tech bubble burst shortly after, and the Dow didn’t reach that target until 2021 — over 20 years late.
Glassman and Hassett weren’t amateurs. One was a former Fed economist and the other held senior government positions. Still, they made the mistake of forecasting massive short-term gains during an already overheated market.

This isn’t an isolated case. In 1929, top economist Irving Fisher famously said stocks had reached a “permanently high plateau” — two weeks before the Great Depression began.

In 1981, technical analyst Joe Granville told his followers to sell everything. He remained bearish throughout the record bull market of the 1980s, missing major gains.

In 2012, bond manager Bill Gross claimed “the cult of equity is dying.” Since then, stocks have more than tripled in value.
The lesson: bold predictions are rarely right. They make headlines, but they often lead to emotional, short-sighted decisions. Fisher, for example, borrowed heavily to bet on his forecast — and ended up bankrupt.

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**Bottom Line for Investors**

Investors don’t need flashy predictions to succeed. From 1928 to 2020, the S&P 500 delivered an average return of 9.8% annually. Over that same period, “safe” 3-month Treasury bills returned just 3.3%.

This long-term “risk premium” explains why equities are so powerful for wealth creation — but only if investors stay the course. Unfortunately, many don’t. Bear markets, corrections, and crises often scare people out of stocks.

Over the past 15 years, we’ve seen a financial crisis and a pandemic-induced bear market. Yet those who stayed invested — or even bought more — were rewarded. As Baron Rothschild put it, “Buy when there’s blood in the streets, even if it’s your own.”
The U.S. market has always favored long-term optimism. The real key to success isn’t guessing the next big move — it’s staying invested despite the noise.

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Katz Family Financial