We find ourselves at that time of year again: While many are resolving to lose a few pounds, join a gym, or spend more time with family, financial experts are busily crafting predictions for 2012. Some will bearishly call for Dow 8,000 while a few brave optimists might predict Dow 14,500. The financial news networks are likely to feature certain in-the-know gurus telling viewers to hide in cash while others might advise a play on growth in emerging markets. If you're hoping to see a laundry list of such forecasts below, I will try to let you down easy. Simply put, I don't think such short-term guesses are dependable or even helpful. Since hindsight is 20/20, we can look back at predictions to check how reliable they have been. In his 1998 book Roaring 2000s, best-selling financial author Harry S. Dent Jr. wrote: "We should see a Dow of at least 21,500 and as high as 35,000, as the baby boomers and recent wave of immigrants move into their peak spending years around 2009.†Years ago the inimitable financial television host Jim Cramer wrote: "Housing bubble? What housing bubble? The signs are in place for a further run-up in real estate.†Then a half-decade later–with the housing bubble rapidly deflating–Federal Reserve Chairman Ben Bernanke announced: "I don't anticipate any serious problems . . . among the large internationally active banks that make up a very substantial part of our banking system.†Ouch! The point is not to pick on Dent, Cramer, and Bernanke, but rather to note that even smart, well-informed people doing their best can be off the mark since the future is far less predictable than we would like. To steer clear of potentially problematic advice, I have a few rules of thumb. When looking for information about the road ahead, try to uncover the "how,†not the "what.†In other words, rather than latch on to a specific market call, figure out what data supports the thesis. For instance, how will U.S. stocks fare going forward? I don't have one number. Rather, I think a two-pronged approach will help uncover the likely direction: What is the long-term return of the asset class, and what do recent returns suggest? Over the past 85 years, stocks have gained, on average, 10% annually. While stocks have gained 9% annually for the past quarter century, the last decade has produced poor performance: stocks have averaged only 3%. Many simply assume that the pain will continue, but reversion to the mean–which holds that after periods of extremity markets tend to go back toward trend–says the opposite. The market is more likely to see double-digit returns over the next decade or so rather than single-digit growth or especially a negative return. (Continued on next page) Another mental tool that can be very helpful is considering the potentially negative repercussions of being wrong. For instance, houses cost less than they have in recent history–likely close to a bottom–and borrowing burdens are lower than they have been for decades. So, I would argue it is a good time to buy a house if you can afford a 20% payment, and expect to stay in the home for five years or more. Even if prices do keep falling, there is no damage so long as you stay in the house and keep current on mortgage payments. Finally, the long term trumps the short term, especially when financial assets are volatile. If you have read a magazine or watched television in the last couple of years, you know gold prices have shot to the moon. Specifically, over the last three years, gold has increased at a remarkable 29% per year. Many are suggesting you should hop on the bullion express. But wait: Over the past 25 years, the annual return for gold is just 6%, well below the 9% return on stocks for the same timeframe. And the price of gold can just sit there for very long periods without moving upward (which, coincidentally, is what gold itself does–it just sits there). Indeed, from March 1987 to May 2005 the return on gold was 0%. These are just examples; they're not meant to serve as the three key recommendations for the year. Rather they are meant to show how low-key, rational, well-informed thinking can help guide you on your path to financial independence. Ultimately the time-tested truisms of finance should serve as starting points no matter what year it is: spend less than you make; maximize your tax-advantaged investments over the long term; stay away from fads; and lean moderately against conventional wisdom rather than following the crowd. If you're able to do these simple things, chances are you'll create wealth more dependably than those who just listen to number-tossing experts at the beginning of the year.