Shorter Time Frames Lead to Better Forecasting

Brad McMillan, Chief Investment Officer at Commonwealth Financial Network, discusses the importance of time frames in economic forecasting in a recent Forbes Magazine article. He claims that when shorter time frames are used, you can have better visibility than over longer periods. The goal is to identify signs of trouble ahead and then reacting to them instead of predicting when they will show up. Over longer periods, though, the variability and potential for surprises make forecasts increasingly unlikely. It’s much better to keep an eye on the data, develop warning signs, and watch for them rather than watch the calendar.

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