As the year winds down, stock market strategists are launching their predictions for what will unfold next year. Cynics may scoff, but I think many of these lookaheads are worth devouring.

You’ve probably seen plenty of market forecasts over the years. They follow a similar pattern.

There’s often a one-year target for a major equity benchmark, such as the S&P 500 or the S&P/TSX Composite Index. Then come details on valuations, profit expectations, economic performance, currency moves and bond yields – a typical mix that can define a year of market activity.

So much effort, so little payoff.

According to a 2023 Vanguard study, total one-year returns for the S&P 500 over the period from 2011 through 2022 were either higher than the most bullish prediction from market strategists or lower than the most bearish prediction 75 per cent of the time.

Let me translate that: Market forecasts were generally way off.

Vanguard isn’t the only critic out there. As Warren Buffett said in 1992: “We’ve long felt that the only value of stock forecasters is to make fortune-tellers look good.”

Economic forecasts aren’t much better, especially in calling recessions.

However, rather than mock their inaccuracy, I think it is worth recognizing the importance of these attempts – even if we don’t embrace their conclusions.

As I see it, there are three reasons to dive into the flurry of predictions now heading our way.

One: The beauty is in the details.

Market strategists often sit at the intersection of economics and equity analysis, and can deliver to us a summary of how dozens of moving parts could work together over the next 12 months.

Right or wrong, there’s a value in knowing how the pros look at everything from corporate earnings and equity valuations, to inflation and interest rates – the fundamental stuff that can be helpful in understanding what affects our investment portfolios.

Two: Forecasts underscore how financial markets work.

Forecasts aren’t wrong because strategists fail to see what is plainly evident; they’re wrong because stocks follow what some academics call a random walk. They react to random events.

Strategists are attempting to predict something that is unpredictable, at least in the near term.

Seeing these smart, sophisticated market watchers get things so wrong – particularly when markets go haywire – can offer valuable lessons for the rest of us: Be humble. Avoid big bets.

Three: They can deliver a sense of calm.

Established Wall Street and Bay Street strategists tend to avoid forecasts warning of market crashes or massive rallies. They know what an average return looks like, and they stick pretty close to it.

In years when fear may be eating away at us, either because stocks are down or a potential bubble is forming, it can be comforting to know that there is a case for staying put.

As small investors, the best thing we can do is to stay invested and diversified, prepared for crashes and rallies. And market forecasts, even when they are laughably wrong, tend to reinforce this long-term approach.

My question for you this week: What is your prediction for the S&P 500 in 2026? Send me your target (the level at which you think the index will end next year) and brief rationale to dberman@globeandmail.com.

To make things interesting, I’ll construct a simple spreadsheet with your responses, generate an average guess based on the aggregate guesses and weigh in as the year progresses. Unlike professional strategists, though, you get to keep your anonymity.