At first glance, it sounded like good news. Last Friday, the US labour department said that job growth surged in December, while the unemployment rate was lower than forecasted. Curiously, the stock market wasn’t celebrating. According to market watchers, a healthy economy could mean fewer interest rate cuts on the horizon — and that’s not good news for Wall Street. The market reacted swiftly, plunging last Friday as investors grappled with the implications. Sequences like these suggest that interest rate predictions can influence the stock market’s direction. Hence, it stands to reason that investors need to pay attention to forecasts or risk finding themselves on the losing end. At least, that’s what the market wants you to believe.

Wrong number, wrong timing, wrong size 

Author and partner at the Collaborative Fund Morgan Housel once quipped that if you read last year’s market predictions, you will never take this year’s predictions seriously. Let’s test his theory....