I believe short-term returns are mainly random

No one I have heard of forecasts markets accurately and consistently, nor has anyone been able to create a reliable model of economies. Moreover, the past is a poor guide to the financial future. Investment guru Warren Buffett reportedly said: 'If past history was all there was to the game, the richest people would be librarians.' It's best to take the view that over the short run (for example, the 12 months of this year), there is a huge random element affecting the outcome of the economy and stock markets. The art of investment starts with the calm acceptance that you don't know what is coming next.

The writer is the chief executive of wealth management firm dollardex.com.

This article was first published in The Straits Times.

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