The Princess and the Plague

My seven-year-old son was having a bad day.
 
Not only was it the last weekend of the school holidays, but his little sister was hosting her fifth birthday party — a princess-themed party with dress-ups, sparkly shoes, and lots of fairy bread.
 
“The party is all girls, Dad!” he cried.
 
“Well, we’re having a princess-themed piñata, and with your cricket skills you’ll absolutely dominate that, champ”, I said, trying to cheer him up.
 
Yet it was no use. He huffed and puffed, and buried his head under his pillow.
 
“Trust me, mate, in ten years’ time, you’re going to love hanging out with all those girls”, I assured him.
 
At that point he looked up from his pillow and scowled at me like I was Cinderella’s Wicked Stepmother:  
 
“No way, Dad. Girls are BORING!”
 
Okay, so my son was doing what we all do: extrapolating the recent past well into the future.
 
And, financially at least, last year kind of sucked:

The Reserve Bank yanked interest rates by 3% (and they’re still yanking), and both the share market and property prices dropped by over 5%, with homes falling at their fastest pace since the GFC (and they’re still falling). Bitcoin was absolutely mauled, falling over 60%.
 
So the sixty-four-million-dollar question is: will things continue to suck in 2023?
 
You probably have a hunch.
 
And that hunch about the future will likely guide the decisions you make today.
 
Here’s the thing though, very few people ever put their predictions under the microscope … and those that do are shocked at how bad they are at it – even highly paid investment managers.
 
So right now I want you to make — and track — your financial predictions for the year ahead. Specifically, spend a moment now thinking about where you think housing, shares and Bitcoin will be at the end of the year.
 
Then take out your phone and repeat after me:

“Hey Siri/Hey Google/Hey FBI,
 
“On the first of January 2024, at 9am, remind me of the following predictions I made today:
 
“Aussie shares will go up/down XX%.

“The Aussie housing market will go up/down YY%.

“And Bitcoin will be trading at $ZZ.”
 
It’s easy to be a hero in hindsight (“I knew 2023 was going to turn out like that!”), but much tougher to do it in real time. So go on, do it now!
 
Oh, and to his surprise, my son ended up having a great time at the party. However, 24 hours later we received some grim news — it turned out that one of the princesses had the dreaded plague. The day before their very first day of school! Who would have predicted that?
 
Tread Your Own Path!