Why is it risky to rely on short term market predictions

Relying on short term predictions is risky because the market is influenced by unpredictable external variables like interest rates or global politics. No one has a crystal ball. Smart investors focus on long term trends and fundamentals which are m…

The full explanation

Relying on short term predictions is risky because the market is influenced by unpredictable external variables like interest rates or global politics. No one has a crystal ball. Smart investors focus on long term trends and fundamentals which are more predictable. By taking a horizon of 5 to 10 years you smooth out short term volatility and benefit from the compound growth of the asset rather than gambling on monthly fluctuations.

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