Predicting what will happen in the future is a lot harder than analyzing what has already happened. Yet, as an entrepreneur, we get comfortable with taking smart calculated risks. To do that we raise our antennae to sense what is happening in the local and the global economy, and we make our decisions accordingly.
My language schools brought thousands of international students to Canada. For a reasonable fee we were able to accommodate these students in host families who enjoyed the experience of having a young person from another culture in their home. However, numbers always fell when elections in Mexico occurred every six years or when the European economy took a beating. We quickly learned to incorporate those international events into our forecasting.
Smart business people are nimble and usually have a Plan B in case their first guess wasn’t as accurate as they hoped. They have a system to check if the results they expected from their business plan are turning out as they should, and if not, they make adjustments as needed. They stay the course.
The smart people, who run the companies in which you invest, or choose the investments inside your mutual funds, also have their ears to the ground. They have a strategy, check the economic data constantly, visit and analyze companies whose shares they are considering or have already purchased, and test their theories and predictions on other members of their team. They use their systems to check the performance of the fund’s assets, and if they are not performing as forecasted, they recalibrate for better results. They are also nimble.
Ideally, you have diversified portfolio of investments or funds focused on Canada, USA and the global market. This ensures that you consistently do well even as those different economies go through their own peaks and valleys. Forecasting is difficult. Try it: for the next 15 days, write down each day how the stock market will do tomorrow. Then check if you were right or wrong. Chances are you were wrong as often as you were right.
Staying committed to your business and your investment plans and adjusting as conditions change, helps you build wealth, no matter what the economy does. Forget the tarot cards!