January 3, 2012

How My Predictions for 2011 Fared

At the end of 2010 I made some predictions for the economy in 2011.   It was mostly for entertainment purposes.  

1. Unemployment will remain high but drop under 9%.   =  CORRECT.     
 I got this one right.   Unemployment stayed high all year and then dropped down to 8.6% in November.

2. Stocks will be up over 10%, year end with S&P 500 > 1400 and Dow > 12,500 = FAIL
 I was wrong on this one.   But I would have gotten it at least half right if I'd predicted a 52 week high of 12,500 for the Dow.   It did exceed that during the year but the Dow didn't end the year over 12,500.   The S&P 500 came close to hitting 1,400 and hit a max of 1,370.

3. Gold will hit $1500 within 2011.    50/50 chance it drops below $1000 =  PARTIAL 
Gold did certainly hit $1,500 during 2011.. and then some.   I was wrong about the 50/50 chance of it dropping below $1000.  But then I am not sure how citing a 50/50 chance was really a prediction so I'm giving myself -1 point for making a non-prediction.

4. Real estate prices stabilize.  Up 1-5%.   = FAIL
Median home prices are down about 4% nationally.   Prices have however been on the rebound for 3 straight quarters.  It does look like things are turning around.  However the annual total change is still negative.   Of course things differ based on what region or city you live in.  As they say : Location, location, location.

5. GDP up 3.5-4% = FAIL
GDP is up more like 2-3% on an annual basis for the year so far.  I was a bit too optimistic on this one. Final numbers aren't out yet but I suspect the trend will not change much when we get Q4 figures.  

I didn't do a very good job playing fortune teller for 2011.


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