PRECISE forecasts need to be treated with scepticism and widespread support for a particular investment doesn't always indicate a sure thing, AMP Capital Investors's Dr Shane Oliver has warned.

He said the most important thing investors needed to be aware of was that crowd support for an investment doesn't always translate into a winning decision.

"People tend to get comfort out of what their friends are doing or what's popular or by media messages," Dr Oliver said.

"So they tend to have that crowd support and the trouble is you find out you're getting in at the top and it's often the time you should be getting out.

"There's nothing wrong with being where the crowd is, sometimes it can take you in the right direction, but you have to be conscious of that.

"There's a danger of going like a lemming off a cliff."

Dr Oliver said forecasts needed to be treated with care because economists didn't always adjust as new information became available.

"Like everyone, market forecasters suffer from numerous psychological biases and precise forecasts are conditional upon information when the forecast is made but need adjustment as new facts come to light," he said.

"You have to change with those facts. Forecasts for economic and investment indicators are useful but need to be treated with care."

In a research note called Myths And Mistakes Investors Often Make, Dr Oliver outlined the myths that catch out investors. He also warned that economists didn't have a perfect crystal ball.

"If I'm asked for the All Ords at the end of the year or the cash rate at the end of the year, it's a nice neat summary way of saying this is my view," Dr Oliver said.

"But I know, and the people who put the surveys together know, a lot of things are going to change between now and then.

"When you look at consensus forecast and compare it to the actual outcome, you'll often find they're wide of the mark."

Dr Oliver said poor economic growth often provided fertile ground for short-term expansion.

"This is true over the long term and at various points in the economic cycle," he said.

He said while the GDP of some of the world's largest economies contracted in 2009, stockmarkets soared. US GDP fell 5.7 per cent in the first quarter while the Dow Jones climbed from a 12-year low of 6547.5 points on March 3 to reach 8440.87 on June 2.