Welcome to the end of the 2012 bull market. No, I don’t mean the end of the bull market. It is just the end of the year 2012. I am pretty sure that the bull market run will continue in 2013, but as I always say, we will see. The reason I say that is clearly stated in the quote below.

  • I do not blame individuals or firms for making forecasts, as a common question this time of year is “what do you think will happen next year?” So, it is natural that forecasts for the coming year would be common. What I do wish to communicate is that the average investor should pay no attention to these forecasts because they are quite often wrong. I learned a long time ago not to pay attention to forecasts because there are too many outside events that can affect the markets direction. One thing I know for sure is that no one can predict the market.

Wow! The above quote is a nice find for someone who has been preaching that notion for some time, but particularly in 2012. Here is another that tickled my fancy and, as well, sends the message I want to send and reinforce. .

  • Watch for all the “so called experts predictions for 2013.” If you have not learned yet, you cannot predict the markets, you can only ride momentum.

The funny thing about me railing about oracles predicting the market is that I do it. In fact, looking back on 2012, I told my brother and sister that the Dow would end the year at 14,000. I said it confidently. Well, unless today’s market turns beyond anything historically known, that prediction will be wrong. Heck! It is wrong. My point is that no matter who makes the prediction, take it with a grain of salt, especially if the oracle is righteous about the prediction. At least when I predict, I always cast a bit of doubt …

This past year was another year of ups and downs in the market and full of seeming contradictions in economic data and financial news. Data that came out this week exemplifies 2012 quite nicely.

  • New single-family home sales accelerated in November to the fastest pace in 2 1/2 years and median sales price jumped from the same month in 2011.
  • Consumer confidence fell to a four-month low in December as a looming budget crisis sapped what had been a growing sense of optimism about the economy

Trying to reconcile these contradictions normally could make one’s head spin, but after 2012, it is simply par for the course. Until the US and Europe get past the politics of debt and monetary policy, expect more of the same. How is that for a prediction?

Anyway, the best course of action for making your money work in 2013 is to study the craft of trading, develop the art of it, and work hard at understanding the big picture, as well as the individual market you are trading. Honestly, there are no shortcuts to success and there is no substitute of hard work. Put in the time and good things will come your way, and if they do not after you have tried hard, consider letting go of trading as a way to make your money work. As it is with many things in Life, not everyone is cut out for trading.

I hope 2013 is a good year for all of us.

Trader Ed signing off for 2012.

Trade in the day; Invest in your life …

Trader Ed