As a chartered member of the chattering class, I am all too familiar with the "perils of predictions." Anyone who works in the financial field and speaks to the press eventually gets tagged for a market forecast gone awry. It's an occupational hazard. Unfortunately, investors all too often give these "predictions" in print or on TV far more weight than they should. It's very easy for a confident-sounding analyst, fund manager or professor to say something on TV that can throw off the best laid plans of investors. I wish an SEC-mandated disclosure accompanied all pundit forecasts: "The undersigned states that he has no idea what's going to happen in the future, and hereby declares that this prediction is merely a wildly unsupported speculation." Don't hold your breath waiting for that to happen. The bottom line is that I've yet to find anyone who can accurately and consistently forecast the market behavior with any degree of accuracy, beyond short-term trend following. That inconvenient factoid never seems to dissuade the prophets -- or the press -- from their fortune-telling ways. There are a few things that investors should keep in mind when encountering these speculations. Whenever you find yourself reading (or watching) someone who tells you where a stock or the markets are going, consider these factors: No one truly knows what tomorrow will bring. Nobody. Any and all forecasts are, at best, educated guesses. All prognostications are instantly stale, subject to further revision. Conditions change, new data are released, events unfold. Yesterday's prediction can be undone by tomorrow's press release. In order to "become right," some investors will stand by their predictions despite a stock or the market going the opposite way, hoping to be proven correct. Ned Davis called this the curse of "being right rather than making money." There are only two kinds of predictions that have some value to investors: One is probability-based, and the other is risk-based. As long as you apply the same rules -- no one knows the future, they are subject to revision and should not be taken as gospel -- then these are sometimes worth considering. Probability assessments are typically based upon historical comparisons of prior markets with similar characteristics: The more variables that align, the higher the likelihood that a given scenario plays out in a similar fashion. They are of this variety: In the past, when X, Y and Z all happened together, then we expect that A is most likely, then B is possible, while C is the least likely.