Why forecasting is hard

I see a lot of questions on the forum from people who are trying to do forecasts. The problem is usually that they have insufficient data to reliably forecast as far into the future as they would like. Further, they do not have a handle on all the variables that could affect their forecast.

Here is a great example of the forecasting challenge. If you saw this graph with data up to the red arrow, how would you forecast the next month?

forecasting2.jpg

This is the reality:

forecasting.JPG

In another example, nobody would have forecasted this dip in the stock market (S&P 500), nor the rebound.

S&P.JPG