When you are thinking about making a major financial decision like upgrading or downsizing your home, buying an investment property or even buying your first home, you will often do research as to whether the timing is right to make such a move.

You will soon realise when you start your research that there are so many conflicting views on what the future holds, often in the same publications, that is very hard to work out who is right?

The simple answer is no one.

Rupert Murdoch once famously said “I am not an economist. We all know economists were made to make weather forecasters look good”.

When I say no one, I mean no one is completely right although some prove to be very wrong.

The first trick is to try and separate opinion from data. I get sent a lot of articles from various sources to read on the state of economy and do my own research from sources I regard as reasonably sensible. Often in the same day, I have read articles from complete opposite ends of the spectrum. One saying how we are all doomed and another saying we are in the best shape we have ever been. Both were opinion pieces but one was heavily punctuated with official Australian Bureau of Statistics data. Data can be sourced and interpreted many ways to suit the opinion of an author, but if you had a choice of two – go with the data that is referenced.

The second trick is to build up an overall picture rather than focus on one specific piece of advice. You are essentially building up a picture of probability – what is the most likely outcome based on the evidence you have seen?

Remember that these are fluid situations and really, even the most educated economists can only express an opinion as to the likely outcomes. They simply don’t actually know.

Even Warren Buffett, the world’s most successful investor, never tries to predict what the stock market will do and doesn’t believe anyone who does. “Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway” he famously quipped.

So if no one is completely right just do your own research and make as an informed decision as you can. The only thing that is completely wrong is doing nothing when an opportunity that makes complete sense presents itself.

w