
Why is stock market so unpredictable?



So often we all try to sit down and try to predict the level of the Sensex and the nifty after 1 year or 3 years. More often than not, these projections are absolutely not worthy. Frankly, nobody knows where the nifty is going to be after one year because the nifty by itself is not an asset class but it is just an aggregation of asset classes.
There are too many factors at play behind the indices and therefore taking any kind of calibrated view on the index is hard. Even when it comes to stocks, nobody knows what the bottom of individual stocks or the top is. You only have an indication of value.
Why? The reason is quite straight because the stock market cannot be controlled by anyone. We humans can predict events that are under our control. However, one can attempt to predict the markets using a plethora of factors that directly connect with market i.e control them.
One important factor that affects markets nature is emotions. Market sentiments affect the price of the stock along with other reasons.
I would say, If you succeed in trading and investing then it is the first basic evident that you possibly predicted the market right.

From a common means view of the stock market can be explained as a rubber sheet which is held on from all sides by people. As people pull, the sheet will expand and then pull the person on the other sides in. The rubber sheet has no fixed shape and our gets defined as people pull out. The same manner, the condition of the market is defined by people. Since people can be unpredictable, the market reflects it.