Everybody wants to know the future.

Not just to ease uncertainty, but because anyone who truly knew what markets would do next could profit from it.

So when someone nails a big market call, the media hands them a megaphone for life.

Never mind that most of these forecasters were right exactly once... and have been wrong (some spectacularly so) ever since.

In today's email:

• Why even the most famous market forecasters have coin-flip track records
• The 4 predictions I'm making (no crystal ball required)
• How a well-built retirement plan prepares you for uncertainty ahead

As always, I'll wrap up with a few of the best retirement and investing articles I read in the past week.

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Before we dive in, did you catch this week's podcast? 👇

The Problem With Predictions

Consider a few of the big names whose market calls have dominated headlines in recent years:

• Robert Kiyosaki, creator of the Rich Dad, Poor Dad empire.
• Author Harry Dent.
• Respected investors Jeremy Grantham and Ray Dalio.
• And Michael Burry, made famous by his housing-market bet in The Big Short.

All incredibly smart. All well-respected. And all have missed the mark for years now.

They're not alone.

CXO Advisory Group tracked 6,582 U.S. stock market forecasts made by 68 well‑known experts and found their average accuracy was about 47% — roughly the same as a coin flip.

The lesson: predicting the future consistently is incredibly difficult, if not impossible.

Which is exactly why I'm about to do it. (Sort of.)

4 Predictions (Without Timelines)

Before I share them, know that I'm following the forecasting advice of investor Howard Marks:

With that, here are four predictions for the years ahead:

1. Corporate profit margins will probably contract.

Margins recently reached their highest level in more than 15 years. That doesn't mean they'll collapse tomorrow, but competition, wages, taxes, and mean reversion have a way of pulling exceptional results back toward earth.

2. Future U.S. stock market returns will probably be lower than the last 17 years.

Over the last century, U.S. stocks have averaged about 10% per year. Since 2009, it's been more than 15%.

That doesn't mean future U.S. returns have to be poor; it simply means investors shouldn't assume one of the strongest periods in market history will continue indefinitely.

It's also a good reminder to stay globally diversified, owning international stocks and companies of all sizes, not just the large U.S. names that have dominated since 2009.

3. The AI trade will end.

Artificial intelligence may continue reshaping how companies operate, and how investors value them.

But eventually, AI will stop being treated as a distinct investment theme. It will simply become part of doing business.

No one knows whether today’s enthusiasm will end in a sharp market reversal or fade gradually over time.

But eventually, investors will expect companies to use AI as a standard part of their operations, much like they now expect them to use the internet, cloud computing, and mobile technology.

4. The companies at the top of the market will rotate.

​Dimensional studied the largest U.S. companies going back decades and found that stocks lagged the market by roughly 1% per year in the decade after joining the top 10.

And of the 10 largest U.S. companies in 2000, only Microsoft remains in the top 10 today.

Historically, these transitions have not marked the end of the market. They have been a normal part of progress.

Why Bother Predicting the Obvious?

You may rightly note that none of these predictions are bold or surprising.

That's the point. 😊

When they inevitably come true, the media will almost certainly treat each one as the end of the world as we know it.

Their business runs on attention—it's how they sell advertising—and scary headlines are the best way to get it.

I'm sharing these now so you can be prepared instead of surprised.

Bottom Line

Nobody knows when profit margins will compress, returns will cool, or market leadership will change hands.

But as Howard Marks also said:

A retirement plan built on diversification and a funded war chest doesn't need to know what's coming next... it's already prepared for it.

📚 What I've Been Reading

• When and How Asset Location Matters (Vanguard)
• Baby Boomer Wealth Is Being Passed Down to the Already Wealthy (MSN)
• How to Invest for Long-Term Care (Morningstar)
• The Hedonic Treadmill (Seth Godin)
• How Does Our Taste in Movies Change With Age? (Stat Significant)​
• Your Life Matters, Even If You Aren't Famous (Darius Foroux)

Thank you for reading!

Please reply to this email with comments, questions, and/or feedback.

Stay wealthy,

Taylor Schulte, CFP®