Like religion, financial forecasting meets a very human desire to know the unknowable. It doesn’t matter whether the forecasts are accurate or not, people sleep better at night under the assumption that there’s a predictable future laid out ahead of them.

So, in the name of community service, I’m going out on a limb and laying down my predictions for 2012:

1. A lot of things will happen that no forecaster thought to include in their predictions for 2012. These events will be the obvious consequences of the current economic and political environment. So obvious, in fact, that they weren’t included in the predictions.
2. Many things won’t happen that forecasters did include in their predictions for 2012. This will be a result of unforeseen circumstances and six sigma events, annual anomalies that crop up one in a million years.
3. A small number of the vast number of predictions about 2012 will randomly come true and the predictors will be proclaimed gurus. This will be despite the fact that it was their 1000^th prediction and the first one they got right.
4. All predictions will be adjusted throughout the year so that the forecaster’s final prognostications, announced on Christmas Eve, will be very close to accurate.
5. Those fund managers that outperform for the year will cite their skills, systems, intelligence and uncanny ability to time the market as the reasons for their outperformance. While acknowledging that past returns are no guarantee of future returns, the past returns will be included in advertising materials in very large font.
6. Those that underperform will cite the randomness of markets and that any one bad year will obviously be followed by a good one, because underlying it all they have superior skills, systems, intelligence and uncanny ability to time the market. Marketing materials will include performance statistics over a more appropriate time frame.
7. Dividends will be more important than capital gains. Unless the market goes up a lot. If the market goes up a lot, capital gains will be more important than dividends.
8. Every single CEO in the country will be in the top quartile of CEOs in the country. They will get paid accordingly.
9. ‘They’ and ‘People familiar with the matter’ will continue their crucial role in the world’s affairs. That is because they know everything.
10. Finally, perhaps most importantly, markets will fluctuate. We expect the All Ordinaries to go up, down or sideways in both the first and second halves of the year.

Keep this list by your side and you can’t go wrong. If you have your own predictions for 2012, add them via the comments box below.