By Shea Sanche, CFP® · Last reviewed: April 2026
Every January, experts line up with market forecasts. History suggests most of them will be wrong. Here's what the data actually shows about annual predictions.
The Track Record of Annual Predictions
Every year, investment banks, portfolio managers, and financial media produce detailed market forecasts: target levels for major indices, predicted interest rate paths, sector winners and losers. Research examining the accuracy of these forecasts consistently finds that they perform little better than random chance over time. In years when the consensus expected a modest positive return, markets delivered either double-digit gains or significant losses. In years when recession was widely anticipated, markets often rose sharply. This doesn't mean the analysts are unintelligent - it reflects the fundamental nature of markets: price formation incorporates available information continuously, and predictable events don't generate returns. Unexpected events do.
What Canadian Investors Should Focus on Instead
- Review your asset allocation: Has your portfolio drifted from its target due to market movements? A year-end rebalance restores your intended risk profile and systematically sells what has run up and buys what has lagged.
- Maximize registered account contributions: RRSP contribution deadline is 60 days into the following year; TFSA room resets January 1. Making sure you're on track for these contributions has a guaranteed, known return - the tax savings.
- Review your overall financial plan: Did major life events - a job change, a home purchase, a birth, an inheritance - create planning gaps that need updating?
- Tax-loss harvesting: If you hold non-registered investments with unrealized losses, December 31 is the relevant deadline for selling those positions and crystallizing losses to offset gains.
The Behaviour That Actually Drives Returns
Research consistently shows that the average investor earns meaningfully less than the average investment - because investors buy and sell at the wrong times, reacting to predictions and headlines rather than staying invested. See our post on why time in the market beats timing. The most valuable thing a financial plan provides isn't exposure to the right market call. It's a framework that keeps you invested, diversified, and focused on your actual goals - regardless of what the predictions say in any given January.
Common Questions
Answers to the questions people actually ask.
How do financial advisors in Canada get paid?
What is a normal advisor fee in Canada?
Are financial advisors worth it in Canada?
Related Reading
Key Takeaway
The most valuable thing a financial plan provides is not exposure to the right market prediction. It is a framework that keeps you invested, diversified, and focused on your actual goals, regardless of what the headlines say in any given year.