Experts Say the Odds of Recession Are... 45%?

That number made me laugh. It’s oh-so-close to 50/50—which basically means no one knows.

This week, the Wall Street Journal published a survey asking economists their outlook on a recession. The consensus? A 45% chance. What stood out to me even more than the number itself was how all over the place the predictions were. These folks are looking at the same data, yet they’re coming to wildly different conclusions.

So it begs the question: who should you listen to?

Or maybe the better question is: should you listen at all?

Personally, I don’t think so. These “experts” often sound confident. They sell certainty. But when you look at the actual track record of their predictions, it tells a very different story.

Let’s be honest—if someone really knew what the market was going to do, which stocks would pop or tank, or exactly when a recession would hit… they wouldn't be talking about it on CNBC or writing about it in Barron’s. They’d quietly be making buckets of money.

(Still skeptical? Look up Renaissance Technologies. They cracked a high-frequency trading strategy and—shockingly—did not publish a how-to manual.)

Dimensional recently highlighted this with a great example. At the start of 2024, several firms made forecasts for the S&P 500’s performance this year. Want to guess how many came close to the actual return?(Spoiler: none of them.)

It’s a small example, but a telling one. And if you keep digging, you’ll find this result more and more.

So sure, tune in to what the experts are saying if you find it interesting. But take it all with a healthy dose of skepticism—and always remember that just because someone sounds sure of themselves doesn’t mean they actually know.