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.

Featured

  • Veterans Affairs
    Blue Signage and logo of the U.S. Department of Veterans Affairs

    VA health record go-live pushed back to July

    The Department of Veterans Affairs is delaying a planned initial deployment of its $16 billion electronic health record project by four months, but is promising added functionality at the go-live date.

  • Workforce
    The Pentagon (Photo by Ivan Cholakov / Shutterstock)

    Esper says he didn't seek the authority to gut DOD unions

    Defense Secretary Mark Esper told lawmakers he was waiting for a staff analysis of a recent presidential memo before deciding whether to leverage new authority.

Stay Connected

FCW INSIDER

Sign up for our newsletter.

I agree to this site's Privacy Policy.