As I recall, I said at the beginning of 2011 that predictions are worthless, but if one takes an outsider’s view there is a 70% chance that the market’s total return will be positive in 2011 and that the most likely event is a 0% to 10% rise. Well, that guess (and I do mean guess) was spot on. Of course that guess was based on a returns histogram that I supplied at the time. I have updated that histogram below.
Guess what I “predict” for 2012? Years highlighted in orange relate to the Great Depression; blue relates to the credit crunch. Notice that there were many more extreme years during the Great Depression than recently.