2023 Stock ML Forecast
February Update 2/1/2023
Stocks ended up in January, the S&P500 was up 6.2% and the Dow was up 2.8%.
We reran the forecast models and updated the stagger charts to determine the accuracy of the original forecasts and will share these here. We plan to do this monthly. The forecasts were of course wrong, which by definition they always are. However, how wrong were they?
We have three stock models all using the Prophet algorithm and open source library: S&P500 with 10 years worth of historical data, S&P500 with 4 years historical data, and the DJIA with 10 years historical data. The forecasts were off by 2.6%, 8.1%, and 4.1% respectively. Established evaluation rating criteria are that anything less than 5% is good (green), greater than 5% but less than 10% is not so good (yellow), and anything greater than 10% is bad (red).
We went ahead and re-ran the forecasts with updated January 2023 data to provide an updated forecast for February and also December (end of 2023).
Here is the summary:
Note: Click on image to see larger more readable grid.
A few things to note:
1. The DJIA forecast remains optimistic projecting an up year.
2. The S&P500 with 10 Years of Historical data has become less optimistic, although still predicting up for the year.
3. The S&P500 with 4 Years of Historical data continues to predict a down year, a bit more so when January data is included.
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Our goal is to forecast various economic indicators using advanced algorithms and machine learning software to see if this can be done and with what level of accuracy, ideally learning and making adjustments as we go along to see if these can be improved.
Please remember that we are not financial advisors and this is not financial advice. ML Forecast and the forecasts presented are for educational and entertainment purposes only. No forecast is guaranteed. In fact forecasts are generally wrong, as the example above proves. Do not use any of these forecasts to make financial decisions. For that talk to a professional financial advisor that can help you with your specific needs.