Your investment outlook vs the consensus one

IT'S a good idea from time to time to pause and assess how similar your investment outlook is to the consensus of chief economists and other assorted forecasters. The beginning of the year is a perfect time to do this, as the flood of reports titled "Outlook for Next Year" usually give a good overview of what the aggregate market is thinking.

One of our constant themes is that when an investment consensus becomes very entrenched, to the point where it is almost taken as a self-evident truth, it will likely mark a major turning point. When your views are the same as the consensus, it is good to carefully re-analyse your reasoning for holding that view.

Last year broke a number of crowd-consensus trades which we covered, from bitcoin/crypto mania at the very beginning of the year to cannabis stocks in the second half. Finally, in the fourth quarter, the consensus that tech stocks and US equities will continue to outperform because of their higher growth rates was dispelled, with investors now questioning the sustainability of growth and margins in companies such as Apple.