The problems faced by so-called experts in financial markets and politics didn’t begin in 2022. One can go back 15 years to 2007 and ask how many experts expected a global financial crisis, a 50% collapse in stock prices or the election of a junior senator from Illinois as the nation’s president.

When the financial crisis finally began to recede in the rearview mirror in 2009, a chorus of voices predicted a global wave of inflation resulting from fiscal and monetary stimulus packages. Instead, deflation and weak demand proved to be the biggest problem facing central banks and governments for the next decade.

Ben Bernanke, the Federal Reserve chairman for much of that era, would eventually produce his own critique in a book called The Courage To Act. The South Carolina native is a diplomatic gentleman, but reading between the lines one could sense a rebuke of those who predicted inflation and called for austerity. Affluent Americans who own the lion’s share of the nation’s financial assets were major beneficiaries of Bernanke’s policies, but the hollowing out of the middle class accelerated. Shortly after he left the Fed, middle-class America had its own message for elites. Against almost all odds, it elected a populist reality show host to the White House, leaving public opinion pollsters chagrined.

Four years later, the first global pandemic in a century produced a four-week bear market in equities that was perfectly understandable. What very few market strategists predicted was that stocks would double in the next 20 months. In that context, the current bear market shouldn’t have been a surprise.

A handful of economists realized the current round of inflation would be far more tenacious than the Fed predicted, but most were, again, caught off guard. What’s next is anyone’s guess.

All this brings us to last month’s election. Most pollsters were touting a red wave that never materialized. Explanations abound, from strong turnout among young Democratic-leaning voters to poor candidates and messaging. But Democratic candidates weren’t very compelling, nor was that party’s messaging. The reality is that if pollsters underestimate intensity and turnout by a few percentage points, it renders all their other calculations useless.

It’s the same story in the advisory business. Five years ago, much of the profession was wringing its hands about how robo-advisors were going to turn the business on its head. The robos have captured lots of assets, but it’s difficult to find a human advisor who has lost clients to one.

In fact, conventional wisdom in this business has now minimized the threat of robo-advisors so dramatically that, if past experience is any indication, it might just be time to take them seriously.

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