Futures forecasting

Classic efficient market theory says you can't beat the market in the long run, and statistics seem to support it. For example, a futures exchange operated by the University of Iowa since 1988 has been more accurate than polls 76 percent of the time for U.S. presidential and congressional elections. So why do futures markets work?

* Many minds are better than a few.

* Traders can quickly act on the most up-to-date information.

* Traders care more about being right because there's money involved.

The Iowa researchers have noted that futures prices — or, in other words, the market forecasts — are usually set by savvy traders who place their bets carefully, not by the occasional investor.

The 2014 Federal 100

Get to know the 100 women and men honored this year for going above and beyond in federal IT.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above