Unexpectedly Intriguing!
19 December 2011

Nobody can predict where stock prices will go next, can they? Especially given the volatility of stock prices, especially in today's market, where the market can swing by more than 3% in any given day, right?

It's just not possible, is it?

To really find out, we ran a two-year long experiment, from April 2009 through April 2011, to see if we could forecast the average value of stock prices for a month at the end of the previous month. Here were our final results:

S&P 500 Average Monthly Index Value, April 2009 to April 2011

As you can see, we offered a split final forecast option for April 2011. Here's what we believed would happen instead:

What we believe is likely is that stock prices will track upward from the average level of 1304 they recorded in March 2011 toward the 1393-1429 level our primary method would forecast as the noise currently in the market subsides.

And that's what happened. In April 2011, stock prices did indeed track upward, rising to an average level of 1331 for the month, with the S&P closing the month at 1363.61.

We took the next several months off from offering public forecasts of where the S&P 500 would head next, but by 26 September 2011, we couldn't resist any more, and posted the following chart, which presents a graphical prediction that happens to cover the period through the end of 2011:

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, December 1991 through 23 September 2011

And here's what the updated chart looks like, through the end of 16 December 2011:

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, December 1991 through 16 December 2011

What can we say? We're still in the zone! And that concludes, for real this time, our public experiment in forecasting the future for the S&P 500!

Labels: ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.