The Next Great Depression is Coming

Your Brain is Being High Jacked

More than anything else our thoughts determine our investment outcome. A person’s return in the market is nothing more or less than a reflection of what they believe. We know the history of the markets. We know that over a long period of time the stock market goes up and to the right. Somewhere around 9 or 10 percent a year. But people don’t get that return. People who actively trade or subscribe to a “pick-of-the-month” newsletter or have their money invested with a Big Box Advisor. Science is very clear on this. People who invest their money actively have returns that are three times less than the market. 96% of professional investors don’t beat the market. So what’s happening?

The market is reflecting your beliefs. Our brains gets high jacked easily. The reason this is important is because our brains get high jacked on a daily basis. The frequency increases especially when you put your money in the market. There is a market commentator called Harry Dent. From a business point of view he is very successful. He’s a New York Times best seller and owns very successful business’.

“The Great Depression Ahead”

This guy Harry Dent wrote a book called “The Great Depression Ahead – How to Prosper in the Crash Following The Greatest Boom in History.” Check out when this book came out on the chart below. It came out on the red dot. Look at how the market has done since the book came out. It’s up over 200%. No great depression. In fact the market has done better over the past 5 year period than it almost ever has!

“The Great Crash Ahead”

Next Harry came out with the book “The Great Crash Ahead – Strategies for a World Turned Upside Down.” Check out on the chart below when this book came out. Well, Harry, this crash didn’t happen either. And guess what? You don’t need the strategies that are in this book because the Crash NEVER happened.

 

“The Sale of a Lifetime”

Now he’s come out with another book. This one’s called the “Sale of a Lifetime – How You Can Profit from the Great Bubble Burst.” Harry is saying that there is going to be a great bubble burst in the next two years. And I KNOW people are scared. People have been hurt by the stock market before and they are scared of being hurt again. So he’s taking advantage of this. Even though he’s been wrong two times before. But this sells books.

All Harry is banking on is that people are asking themselves, what they want. Most people say that they don’t want to be hurt again and that they don’t want to miss out again. So how do they balance that? What people are doing is going out and buying books like Harry’s that seem to fill that emotional need. But in the end it actually hurts them. Again.

“The Roaring 2000’s”

Here is another book that Harry came out with in late 1999 called the “Roaring 2000’s -Building The Wealth And Lifestyle You Desire In The Greatest Boom In History.” Wow. You might have been saying at the time The Roaring 2000’s? I got to get this! Well did you know that the first decade of the 21st century was horrible for the stock market? After this book was written the market fell over 50%! Just look at the price chart below.

By the time the market got back to its 2000 high was in 2007. That’s 7 years! It’s not just the depth of the fall (50%), but the length (7 years). And that’s if you didn’t screw up by pulling your money out. These books hurt people.

So What’s the Answer?

You can follow the charts. The charts don’t lie. The charts and the markets and the price is always right. Nature is always right! No one thinks nature is wrong. But people always protect themselves from it. So why don’t they do the same thing with the stock market? The market is 100% right 100% of the time. What might not be right is your view or your interpretation of the market. So you need to align yourself with.

 

RCPeck-Dig Signature.JPG     
RC Peck, CFP 

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