Every year we ask Wall Street and Main Street types for predictions. Let's see who was more accurate for 2013.
It’s always fun to look back on predictions and see if they’re right – such as those made in this 100-year-old Ladies’ Home Journal article that correctly predicted we would have telephones across the world and ready-made meals delivered to our homes in “automobile wagons.”
Of course, not all predictions pan out as expected. That same article also said the letters “C,” “X” and “Q” would be eliminated from our everyday alphabet (should have gone with cursive instead) and university education would be free (ha!).
For a look at the outcome of some more recent predictions, watch the video below. Money Talks News money expert Stacy Johnson looks at how Wall Street and Main Street did when predicting what would happen with stocks, oil and the housing market in 2013.
No one predicted the incredible stock market boom
Before the start of the year, Stacy talked to Richard Sylla to get an expert opinion on what would happen to stocks in 2013. Saying he was an optimist, the economics professor and chair of the Museum of American Finance predicted the stock market would see 10 percent growth and may even see stock indexes hit all-time highs.
And what did Main Street think? Well, the man on the street said stocks might increase a more modest 5 percent.
Ends up they were both wrong about the percentages. The stock market was scorching in 2013 with the Dow Jones ending the year with a 26.5 percent gain.
Sylla might have missed on the percentage growth in the market, but he was right about one thing: Many index funds did hit record highs. The Standard & Poor’s 500 was up about 30 percent by the end of the year, and the Nasdaq gained 38 percent.
Wow! I sure hope you had some money in the market during 2013. If not, it may be time to check out Stacy’s article on “How Do I Invest in the Stock Market?”
Oil price predictions were also off
For an expert prediction on oil prices in 2013, Stacy turned to the federal Energy Information Administration.
That agency forecast oil prices to be about $88 per barrel at the end of 2013. However, crude oil averaged around $95 per barrel in January 2013 and never really dropped much below that.
Main Street wasn’t as optimistic as the experts, and the folks interviewed by Stacy thought oil prices would rise to $120 per barrel by the end of the year.
The actual price of oil ended up falling in between the two predictions. Oil ended the year selling at a price just shy of $100 per barrel.
Housing predictions make for 0 in 3
Both Wall Street and Main Street were on the same page when it came to housing market predictions. But that doesn’t mean they were right.
Real estate website Zillow surveyed more than 100 housing experts and boiled down their predictions into one Wall Street worthy estimate: Housing prices would go up an average 2.5 percent in 2013. Main Street agreed, saying a 3 percent rise in real estate values was their guess.
However, they were both way off. Information intelligence firm CoreLogic says, as of the third quarter of 2013, housing prices had jumped by 12 percent. That’s good news for those of you with underwater mortgages.
In the battle between Wall Street and Main Street, no one seemed to do a good job making predictions for 2013. If we have to pick a winner, the nod probably goes to Wall Street since they called the record stock indexes.
Wondering who will win the next round? Watch for Wednesday’s video in which Wall Street and Main Street will give their best guesses for what to expect in 2014.