At the beginning of every year, Wall Street experts predict what the financial world at the end of the year.
But is Wall Street really any smarter than Main Street? Every year I get predictions from Wall Street experts, then I literally stop people on the sidewalk and ask them the same questions. And now it's time to find out who got it right last year.
Let's start with stocks. We asked Dr. Richard Sylla, economics professor and Chairman of the Museum of American Finance what he thought was going to happen to stocks in 2013.
"I think the stock market next year may go up about 10% for the year and probably the indexes will set new all-time highs."
Here's what does Main Street said:
"I think stocks will go up 5% this year."
So Wall Street said up 10%, Main Street said up 5%. What actually happened in 2013? As of late December, the Dow was up more than 24 percent, and is sitting at all-time highs.
How about, oil?
The Energy Information Administration forecast oil prices to be about $88/barrel at the end of 2013. Main Street predicted:
"It'll probably be about $120 I think, a barrel.
As the year ended, oil was around $100.
Now ... housing prices. Real Estate site Zillow surveyed more than 100 experts and predicted home values would go up in 2013, by about 2.5%. Main Street felt about the same way:
"I think they're going to go up by 3 percent."
Both were pretty far off. According to Core Logic, as of the third quarter 2013, average home prices nationwide rocketed an astounding 12 percent.
So, looking back at 2013, Wall Street definitely trounced Main Street, but I've been doing this for 10 years and I can tell you that's more the exception than the rule. But now it's time to look at 2014.
We're going to have predictions for you on that in my next report.
In the meantime, go to moneytalksnews.com and do a search for "predictions." For Money Talks News, I'm Stacy Johnson.