The Power of Compound Interest

A dollar is worth more today than it is tomorrow, and with the help of compound interest, that couldn’t be truer. This concept is often referred to as the “time value of money” and it shows us that those who are too hesitant to invest their money are in fact, choosing a negative investment.

It seems like discussing retirement is usually reserved for those who are older and approaching the end of their careers. For one reason or another, young people are seldom encouraged to open and contribute to investment accounts while the potential for growth couldn’t be greater.

What is Compound Interest?

To better understand compound interest, we can contrast it with simple interest. With simple interest, you can gain a return on your initial investment over any number of periods. If you invest $1,000 and the return rate is at 5% annually, your account will earn $50 year after year. The growth will be linear. At the end of the first year, your account balance would be $1,050 and increase to $1,100 and the end of the second year, then $1,150, and so on.

On the other hand, compound interest allows the growth to be exponential. The 5% annual return rate is a percentage of the new account balance year after year. The return would increase every year instead of just being the same $50. Because your account balance is higher each year, so is your return.   At the end of the first year, your account balance would be $1,050 and increase to $1,102.50 at the end of the second, then $1,157.63, $1,215.51, and so on.

The Power of Starting Early

Compound interest can be highly profitable, especially over the long run. To illustrate this, we’ll compare a set of twins, Simon and Duncan, who took slightly different approaches to investing and compare the results when they reach retirement.

Simon decided to begin investing as early and as much as possible. At age 27 he had zero dollars in his IRA but decided to dedicate $6,000 per year until retiring at age 60. Over the 33 years, his highly diversified portfolio had an average annual return of 11%. When he retired at age 60, his IRA’s balance sat at $1.65 million.

Duncan brushed off retirement savings when he was younger. He’s got so much time left, so why worry about it right now? So he opened up his retirement account 10 years later than his brother Simon. At age 37, Duncan began investing $7,000 per year ($1000 more than his twin) and received the same 11% annual return and retired at age 60 just like Simon. But his IRA’s balance only grew to $638,000.

Those 10 years made a difference of over $1 million! From age 27 to 37, Simon only contributed $60,000 but those early contributions made it so that he was over a million dollars richer at age 60. Duncan did very well but could have earned so much more had he simply started a few years earlier.

This chart shows us that the total amount each of them invested was very close. But Simon’s early start gave his money more time to grow, making his balance down the line so much greater. And the huge financial advantage does not end there. During their retirement years, Duncan’s account would continue to grow at about $70,000 per year, while Simon’s account would be earning about $182,000 per year (assuming 11% avg. annual return rate). After 10 years in retirement, Simon will have earned over $1.1 million more than his brother.

The purpose of this example is not to urge anyone to compare their numbers with anyone else’s. We all have unique financial positions. Rather, it is to help us understand the extreme potential in long term compound interest and the colossal effects of putting off investing. “We’re in a recession so it wouldn’t be good to invest when everything is crashing…There’s an election coming up that will crash the market…Stocks have been so green lately, I don’t want to buy in when everything’s high…” We can always come up with reasons to not invest in our futures. But what a mistake it would be to act as the slothful servant who buried his talent out of fear, instead of investing it like his brothers (Matthew 25).

By Brenton Walker


“Compounding and the Cost of Waiting.” Compounding and the Cost of Waiting – Wells Fargo, Wells Fargo,

What to do during a Stock Market Crash

So the stock market has hit “bear market” territory over the last few weeks which is a 20% drop from the previous high.  And many people are panicked!  But panicking after a big drop in the market can be very bad for your long term retirement account.  Especially if that panic involved pulling your money (20% less than you had 4 weeks ago) out of the stock market.

This might sound weird but I actually got excited when the stock market took it’s big tumbles over the last few weeks.  I have been waiting for a good opportunity to “buy low” in the stock market.   Yes, now is the best time to put extra money into your retirement investment account.   Buying shares in a time like this is like when your favorite store has a 20% off your entire purchase sale!  Basically, you get the same items for a lower cost.

There are a few reason why I don’t panic when the stock market goes down.

First, I understand that the stock market has always come back from corrections and crashes to reach new highs.   Along with that, I know that the stock market as tracked by the S&P 500 has made about 10% per year on average over the last 30 years.   I often get asked by people, what if it just keeps going down and I lose all my money?   Investing in a diversified mix of over 12,000 stocks makes it very unlikely for you to lose all of your money.  What are the odds that 12,000 companies across the world in different sectors providing different products all go bankrupt at the same time?

Second, I know I am in this for the long haul.  Every investor is at a different place and will use their money for different things.  If you are needing the money you have invested in the next few years, you should definitely not have a vast majority of your money in stocks.   Even throughout retirement,  why wouldn’t you stay invested and give your money a chance to grow and keep up with inflation.  Smart people look at investing as a lifelong thing.

Third, I don’t believe that me or anyone else can accurately predict the future.  This is a big one.  I get asked all the time innocent questions about investing and the stock market from clients and others that are all based around predicting the future.  Questions such as, is this going to end up being a crash?  Do you think stocks are overpriced?  How much do you think a diversified mix of stocks will make this year?  When I answer this question by saying I cannot predict the future, people are usually not satisfied.   The great thing about it is that you do not need a prediction about the future to be a successful investor and make money in the stock market.

Lastly, I believe in the phrase, buy low and sell high.  It is usually the hard thing to do at the time.  When the stock market is crashing down and you see the headlines say, this is the biggest drop in the Dow in its history, it isn’t necessarily an easy thing to buy stocks on that day.  On the opposite end, when the market is up for 2 straight years and the economy looks great and the headlines say, this is just the beginning for stocks, it isn’t easy to rebalance your portfolio and thus sell stocks.

Ultimately, we know there are going to be stock market ups and downs in the short term, but if you have a low cost diversified mix of stocks you will be doing alright in the long term.

By Jimmy Hancock


1. Matson Money. Separating Myths From Truths, The Story of Investing. N.p.: n.p., n.d. PPT.

How Good Were Stocks in 2017

International stocks continued the hot streak and finished the year well ahead of US stocks, while both categories did much better than Bonds.   The following is an excerpt from the Matson Money quarterly statement.

“The 4th quarter of 2017 saw a continued increase in broad equity markets,  both domestically and internationally. U.S. stocks grew by 6.64% as represented by the S&P 500 index, while international stocks had another  positive quarter to book-end their stellar 2017, with the MSCI EAFE index  returning 4.23% for the quarter. After underperforming U.S. stocks for the last several years, the EAFE returned 25.03% for the year, leading the way against  U.S. stocks. Additionally, emerging market stocks outperformed both  domestic and developed international stocks, with the MSCI Emerging  Markets Index rising by 37.75% for the year.

In recent history, we have experienced an extended period of rising returns. Using the S&P 500 Index as a proxy for the stock market, there have been 14 consecutive positive months, and 21 of the last 22. Extending this time-period out longer, over the last 5 years 19 of the 20 quarters have been up. While periods of up markets returns are undoubtedly easier to go through than those of volatile and/or down markets, they can have negative consequences on investors just the same. Many investors equate the idea of “staying disciplined” to not panicking and selling equities while they are down, and indeed, this is an important trait. However, staying disciplined is equally important and can be equally as challenging during times when everything seems to be going well. Deciding upon a personal risk tolerance and time horizon for your investments is one of the earmarks of a sound financial plan. In 1996, then-Chairman of the Federal Reserve Alan Greenspan coined the phrase “Irrational Exuberance” to describe investors who let their current emotions resulting from a hot stock market supersede rational, prudent investing. In simpler terms, they were ignoring their personal risk tolerances because of a period of favorable returns. An argument can be made that managing behavior is the most important aspect of being a good investor. Unfortunately, it is probably also the most difficult part of being a good investor. Despite Greenspan’s warning, many investors loaded up on investments that were riskier than what was prudent for them. Not only by increasing equity exposure, but by investing in hot sectors such as tech start-ups. The idea of missing out on the returns that one perceives that  others are receiving can be a strong motivator.

Unfortunately, many people who overextended themselves were exposed to dramatic losses. From September 2000 to September 2002, the S&P 500 lost over 44% of its value, and the NASDAQ, which is an index of tech company stocks, fell 78% in 30 months from peak to trough, with many individual  companies going to zero. In today’s environment, there is a danger for some investors to repeat the mistakes of the past. With stocks going up 19 out of 20 quarters, it can be easy for one to ignore the downside risk of equities and try to ride the current wave of good returns.

In the 90’s, many investors saw those around them supposedly getting rich by owning start-up companies that were taking advantage of a new paradigm of technology. In the same fashion, today cryptocurrencies are the hot new technology. While no one truly knows how long stocks will continue to rise or how high Bitcoin may go, it is important for investors to not get caught up in the hysteria and stray from the level of risk that they can handle. In the end, choosing a wise financial strategy -and sticking to it -can have  tremendous impact on an investor’s long term financial health. Chasing performance through buying and selling is a risky game. Historically speaking, it will only reduce an investor’s real return. Relying on unbiased, non-emotional advice from a trusted investor coach to make good decisions can help an investor bridge that gap between what the average investor makes and the return of the market.”


  1. Matson Money. “Account Statement.” Letter to James Hancock. 15 Jan. 2018. MS.

5 Bad Money Saving Strategies

With 2015 now gone and the clean slate known as 2016 is here, many of us plan to save more money this year than we did last year.  In order to be able to put money away money towards retirement, we have to be able to save some of the money we are bringing in.  We’ve all done it. Spent more than we wanted to all in an effort to get a great deal. There are a lot of wrong ways to go about “getting a great deal” and here are a few of the popular ones.

1. Buying in bulk.

While buying in bulk can be a cost-effective budgeting strategy, often consumers end up buying more than they need, and paying more for it in the process. If there is a product or service that you use on a routine basis that you can get at a good price, great. But just be careful not to spend more for extra items that don’t fit into your budget or may end up going to waste.


2. Only purchasing discounted items.

While it may look like you’re getting a great deal on a discounted product or service, sometimes you really do get what you pay for. Trying to save money upfront can end up costing you more in the long run. You may end up having to repair a problem that arises, or replace an item that just didn’t last as long as it should have.


3. Spending more for higher quality.

Spending more for quality is something that can cause you to rationalize an expensive purchase. But spending more doesn’t always mean getting more. One of the main reasons “name brand” things are more expensive is because they pay a lot of money to advertise to you.  Before deciding to spend more money on a product or service, do your research. Find out if you are in fact paying for higher quality, or if you’re just paying more.


4. Always using that coupon that comes in the mail.

Coupons are a great way to save money, but not if they prompt you to make an unnecessary purchase. Often, retailers send out coupons so consumers go shopping when they otherwise wouldn’t have. You may find yourself spending twice as much as you planned, all because you couldn’t pass up a deal. And buying something you don’t need at a discount is still a waste of money.

5. Buying at a discount now thinking you’ll use it later.

Retailers may promote gift cards that offer to double your money if you pay upfront. This can be a great strategy to save money, but only if you planned on shopping at that retailer in the first place. Otherwise, you may not end up using the card. The next time you purchase a gift card at a great price, make sure it’s at a retailer where you are planning to shop.

I think all of us have made one of these mistakes at one time or another.  Make sure you are looking for promotions on things you actually need and planned on buying.  Don’t get sucked into making additional, unnecessary purchases in the process. Also, do your research before making any purchases to ensure you pay for the right thing at the right price.

By Jimmy Hancock

What is an Investment Coach?

What is a coach?
When it comes to investing, most investors (even Warren Buffet had a coach—Ben Graham) could benefit from a coaching relationship. However, for the coaching relationship to be a successful one, the individual must give permission for the coach to “coach!” Absent that permission the coaching experience will fail!
A coach, aside from teaching and even re-teaching fundamentals on an ongoing basis (something that is necessary in all coaching relationships) and helping to put it all together for an investor has other important responsibilities to the relationship. Perhaps most importantly a competent investment coach will refuse to allow an investor to execute any strategy that he or she believes is harmful to the investor’s long-term goals.
In other words, the coach will refuse to be an enabler or facilitator of negative behavior and will say NO—as well as provide the necessary discipline to keep the investor on course towards the realization of his or her long-term goals.
Absent this permission to coach, any competent coach will necessarily refuse the engagement and, if already engaged and the investor wishes to change the terms of the relationship, terminate it when the investor becomes “un-coachable!”

Investment Coach vs. Financial Planner

You now know what an investment coach is, but how does that compare with any old commission based financial planner.  A financial planner is someone who sells products.  Their main focus may not be on you, but on which product to sell you that will give them the biggest commission check.  Rather than focusing on the long term relationship and process with you, they often worry more about making the sale.  Rather than encouraging you to stay disciplined in hard times, they might encourage you to move your money to different fund or type of account, so that they can get paid again on the money.

Are You Coachable?
So the question for all investors is: “Are you in the hands of a competent coach or is your advisor/planner an enabler or facilitator who will allow you to do whatever you wish—even if they know it is harmful and detrimental to your long-term investment success.
Are you coachable and will you give permission to be coached? Are you willing to be an active participant in the coaching process or do you wish to just sit back, passively, and “trust” and “hope” that your adviser is working in your best interests? If it is the latter, you are not coachable!
Will you allow your investment coach to say NO to you when necessary and supply the necessary discipline to enable you to succeed as an investor?
Are you ready to be coached toward attaining a successful, long-term investment experience?
Last, but not least, if you think you don’t need a coach, keep in mind that the best of the best, whether in athletics, entertainment, business or the professions all have coaches to help them reach the highest plateaus of success in their chosen endeavors.
Are you coachable?

by Jim Hancock

Comment on this Blog, send me an email:, or call me at 208-520-4674.

Life Insurance 101

The subject of life insurance may not sound all that exciting, but it is an extreme benefit to those who have it.    A lot of people think that since the concept of life insurance is simple, the products are simple as well.  That is not true at all, especially today where there are so many options and riders.

Living without life insurance can be scary, is a risk that should not be taken.  One of the biggest paybacks for those who have life insurance is the peace of mind that comes along with knowing your loved ones will be protected and set financially in the case of your death.  Even if you have term insurance and don’t actually end up dying before the end of the term, the increased peace of mind is worth it.

Whether you have life insurance or not, this is applicable to you.   I am going to go over 5 common myths that you might have heard about life insurance.  In addition to your own edification, and frankly, for the safety of your loved ones’ financial futures, it’s important to understand exactly what life insurance is, what it does, and how — not to mention if — you should make a move either to purchase or upgrade your coverage. Read the myths below to see if you need to adjust your thinking when it comes to life insurance.

1. The coverage you get at work is enough.

Life insurance through your employer can be a big financial help, but usually doesn’t even come near the amount or length of coverage you need.  It is also dependent upon your employment with that company which can never be guaranteed.  The coverage you get from work may be enough, but only if you’re single, in good financial standing, have no dependents and aren’t worried about estate taxes.   For most people, the term policy offered through their employer just won’t be enough to sustain their families’ needs. After all, your insurance payout must not only support your family financially and pay for your funeral, it must also pay off any debts, such as the mortgage or car loan, as well as settle up with Uncle Sam.

2. Only the working spouse needs life insurance.

This is a curious, and completely inaccurate belief, yet it somehow persists. Life insurance on the breadwinner is there to fill in the gap left by the loss of a income, but that discounts all the valuable work a stay-at-home partner contributes to the family. How would you pay for child care, the cleaning, or even manage the household, let alone the definite costs of the funeral, without a little financial help in the event of such a loss? It can be hard to monetize the many contributions of the non-breadwinner, but to overlook them would be remiss.

3. The value of your life insurance coverage should equal two years’ salary.

Everyone’s financial circumstances are different, and so are their life insurance needs. You might require more coverage than two years’ salary if you incur medical bills or other debts, have a young family, a mortgage to pay, or any number of life obligations to meet. If you don’t have any dependents, and you don’t have a mortgage, then two years’ salary may even be excessive.  A lot also depends on what gives you peace of mind regardless of your circumstances.

4. Single people without dependents don’t need to own life insurance.

While it’s true you might not have a family to provide for, odds are you’ll still have to cover the cost of your funeral, pay off a few debts, and maybe leave a little bit behind for your parents and or close friends.  Also, using a life insurance policy to fund a gift to a favorite charity can be a wonderful legacy for a single person to leave behind.

5. You don’t need professional services to buy life insurance.

A professional life insurance agent can help you identify the needs you have, what you must protect and how best to protect it. With the knowledge of a myriad of different policies, riders, coverage amounts, prices, and benefits of different companies, a licensed agent can help you find exactly what you need for the right price.

Life insurance is an important product for most everybody to consider, but it helps if you have your facts straight. So whatever else you think you know about life insurance, you might consider running it past an agent or advisor.  If you have questions or would like a life insurance quote, contact us.

By Jimmy Hancock

Considering Buying Gold? Read This First

We have all seen the advertisements and headlines that keep telling us that investors need to flee to safety and buy gold.  They will tell us that the stock market is going to crash worse than last time, and that investors need a hedge to inflation with gold.  They will say it with charisma and inflict fear upon us as investors.  Even I have found myself a little fearful at times.

I have put in the research, and gold as an investment does not make sense for most investors, especially long term investors.  Gold as an investment may give some assurance to the leery, older investor, but the numbers just dont add up like you might think they do.

Show me the Data

The reason gold is not good as a long term investment is because the growth of the price is extremely low compared with stocks.   Check out this paragraph from article I found.

“Because of inflation, a dollar acquired in 1802 would have been worth just 5.2 cents at the end of 2011. A dollar put into Treasury bills at the same time would have grown to $282, or to $1,632 had it gone into long-term bonds. Held in gold, it would have grown to $4.50. True, that’s a gain even with inflation taken into account. But the same dollar put into a basket of stocks reflecting the broad market would have grown to an astounding $706,199.” 1

1 single dollar grows to almost a million dollars in stocks, but in gold it grows to $4.50.   That stat alone teaches us not only the weak gold price growth, but the extreme growth potential in stocks.

So what about more recently?  Let’s look at Gold’s return over the last 25  years

Over the last 25 years the real return(inflation adjusted) of gold was a measly 1.5%, and 4.1% before inflation adjustment.  2. Stocks as indicated by the S&P 500 over the last 25 years had a return of 9.62%. 3.  That is over 5.5% per year increase compared to gold.  Yes, that includes 2008 stock market crash.  If you understand the value of compounding, you know you can’t afford Gold’s return in a long term portfolio.

The current price of an ounce of Gold is $1,115.60.  This is a far cry from where it was just a few years ago when it reached its peak above $1900 in 2011. 4.  If you jumped on that bandwagon, you have hopefully learned a valuable lesson.

Gold as a hedge against inflation

A lot of people that invest in Gold do it knowing about the low long term returns.  The reason they give is it is a hedge against inflation.   I understand this side and its merits, but have 2 minor push backs to that.  First of all, how can you compare the inflation rate, a very constant thing year after year, to the price of gold, which bounces around on extremes year to year.   Second of all, how are stocks not a better hedge against inflation?  If the CPI goes up due to inflation, stock prices also increase.  We saw that with the huge growth rate of stocks back in the 80’s when inflation was very high.

One Case for Gold

The only reason I would ever advise someone to buy gold, is if they believe that a catastrophic, life altering event is coming in the very near future.  If you think we are going to go back to hunters and gatherers and that capitalism will disappear, then I suggest you buy gold.

Final Say

Past performance is no guarantee of future results, but in my opinion gold is not a good hedge against inflation, and it is not a good long term investment.  Investing in Gold is better than keeping all of your money under your mattress, but this is a good, better, best argument.  Invest in a globally diversified portfolio filled with stocks and short term fixed income.

-By Jimmy Hancock


1. “Investing in Gold: Does It Stack Up? – Knowledge@Wharton.” KnowledgeWharton Investing in Gold Does It Stack Up Comments. Wharton School of the University of Pennsylvania, 22 May 2013. Web. 15 Apr. 2014. <>.

2. Carlson, Ben. “A History of Gold Returns – A Wealth of Common Sense.” A Wealth of Common Sense. N.p., 21 July 2015. Web. 18 Aug. 2015. <>.

3. “S&P 500.” Wikipedia. Wikimedia Foundation, n.d. Web. 18 Aug. 2015. <>.

4. “Yahoo Finance – Business Finance, Stock Market, Quotes, News.” Yahoo Finance. N.p., 18 Aug. 2015. Web. 18 Aug. 2015. <>.

Who Should You be Getting Investment Advice From?

If you are looking for advice on investing, you can look just about anywhere and get some opinion.  It is important to understand the reason behind the advice that someone is giving, and also the education and evidence behind the advice given.

Suitability Vs Fiduciary

Brokers/life insurance agents/banks that offer investment advice have an obligation to provide advice that is merely “suitable” for their clients. This means that they don’t have to act solely in the best interest of their clients. For example, a mutual fund may be “suitable,” even though it has a much higher management fee and a lower expected return than a comparable, less expensive index or institutional fund.  If they have 2 funds that are suitable for a client, and they choose the one that gives them the most commission, they have legally done nothing wrong.

Registered Investment Adviser (RIA) firms have a fiduciary duty that legally binds them to always act in the best interest of their clients. In the example discussed above, advisers with an RIA firm would violate their fiduciary duty if they recommended the fund that benefited them the most.  RIA firms cannot receive commissions from selling investment advice/products.   1

The Financial Media

“The financial media on the other hand have no legal obligation to viewers or readers other than what is imposed by common law (such as laws relating to libel, slander and defamation).  The financial media’s lack of a high legal standard explains the wide swing in the quality of the information it disseminates.”  1

Terrible, Irresponsible Advice

“Enter Jim Cramer.”

“In a shameful, irresponsible segment aired on his Mad Money show, Cramer counseled investors to “think about the unthinkable” and gave “advice”.   His “insights” included:”

“An observation that “Wall Street” has designated some stocks (such as Costco, ConAgra and Coca-Cola) as “safety stocks.””

“Cramer offers no historical data indicating that stock picking and market timing are prudent strategies. Even if they were, I am aware of no credible evidence that Cramer’s stock recommendations are likely to be more accurate than those of a monkey throwing a dart at a board.”

“Larry Swedroe did a comprehensive analysis of Cramer’s stock picking ability in this blog post. He referenced peer-reviewed studies (something Cramer never does) that found that volume soars when Cramer recommends a stock, but profits quickly disappeared. Swedroe concluded that “after costs Cramer’s picks have negative value to investors who act on the buy recommendations.””

“Here’s the underlying problem. Many investors are unable to distinguish between sound, evidence-based advice… and the wacky entertainment provided by Cramer. Especially in times of crises, those who succumb to Cramer’s nonsense may find their retirement dreams seriously affected. For CNBC and Cramer, it’s apparently of little concern, as long as those advertising revenues keep rolling in.””  1

Key Takeaways

  • Never fully trust advice or products sold to you by someone who does not have a fiduciary duty to do what is in your best interest.
  • The Media does not care about your retirement account, and are only there to make money.

By Jimmy Hancock


Solin, Dan. “Best and Worst Investing Advice During the Shutdown.” Web log post. The Huffington Post., 15 Oct. 2013. Web. 21 Oct. 2013.

Second Quarter Market Recap

The second quarter saw continued small increases in the stock market almost across the board.  The only real loser is the owner of long term fixed income, as rates increased bringing prices down rapidly.  The S&P 500 Index (Large Cap Stocks) rose 0.28% in the quarter, extending its streak to ten consecutive quarters of positive gains. However, for this quarter once again, international equities outpaced U.S. stocks, with the MSCI EAFE Index (International Large Stocks) increasing 0.84% and the MSCI EAFE Small Cap Index (International Small Stocks) rose 5.88%.  1.

The Free Market (Matson Money)  Funds:  Year to Date Returns   1.

US Equity Fund: 2.20%

International Equity Fund: 7.23%

Fixed Income Fund:  0.39%

What can we learn?

The following is education from Matson Money on what we can learn from the recent market trends.

“The market performance over the last several quarters can serve as an educational opportunity for investors. In 2014, the market saw U.S. large cap stocks performing well compared to small cap stocks and international stocks, which could have driven investors to become overly focused on S&P 500 companies. In the most recent quarters however, tides have turned. In 2015, international equities and U.S. small cap stocks have both significantly outperformed U.S. large cap stocks, and investors who became too myopically focused and had forsaken  diversification by neglecting these asset classes would have missed out on the returns.”  1.

“Those investors who are not educated and disciplined with the help of an adviser can easily fall prey to the next trend or news story that will seemingly impact the financial markets. The current occurrence of this is the headlines of the impending Greece default and potential exit from the Eurozone. Those listening to news anchors or reading financial news may be tempted to think that this global economic uncertainty will throw the EU into a tailspin and have a ripple effect across the global stock market. In reality, there have been 47 country defaults since 1975, and the global equity markets have continued to thrive and create wealth for investors over the long-term despite these defaults. “This time is different” is often championed by those in the media, but it is commonly an overused sentiment; the situation in Greece is no different. Prudent investors know that current economic conditions should not change the strategies chosen to accomplish one’s long-term goals.”  1.

By Jimmy Hancock


1. Matson Money. “Account Statement.” Letter to James Hancock. 1 Apr. 2015. MS. N.p.

The Worst Investment Advice Ever

I go online to check Yahoo Finance everyday to see how the stock market and other markets are doing.  I try to stick to the numbers and real information, and avoid the headlines and articles most of the time.  But, about a week ago this was the headline that couldn’t be missed.

Economist Predicts: “The Greatest Stock Market Collapse since the Great Depression”.

Talk about a bold prediction.  And the picture associated with the headline was the most intriguing part for me.  It was the one and only Harry Dent.  Although his name and actions are similar, don’t get him mixed up with Harvey Dent, the 2 face villain in “The Dark Knight”.   Obviously this caught my eye, so laughing I clicked on the link and it took me to the article.   This is where it gets comical.

This is the first paragraph…

“The man who called nearly every major economic trend over the past 30 years…including the 1991 recession, Japan’s lost decade, the 2001 tech crash, the bull market and housing boom of the last decade and, most recently, the credit and housing bubble has issued a startling new prediction.” 2.

The man they are talking about, Harry Dent, is the same man who in 1999 wrote the book “The Roaring 2000’s, which predicted the greatest boom in  the US stock market history.   Just so you know, from 2000-2009, the annual return of the US Large Stocks was -0.95% per year.  Nice try Harry! 1.

Then in 2009 (yes, after the crash of 2008) wrote a book entitled, “The Great Depression Ahead”…   Speaking of which, the US market has bounced back in an incredible way and has yet to have even a down year since the book came out.

The filth continues…

“In fact, Dent says, “We’ll see a historic drop to 6,000… and when the dust settles – it’ll plummet to 3,300. Along the way, we’ll see another real estate collapse.  Gold will sink to $750 an ounce and unemployment will skyrocket… It’s going to get ugly…  This is not fear-mongering. This is today’s economic reality” 2.

If this is not fear mongering I don’t know what is.  Any investor who reads this junk has fear and panic running through their blood.  This is so detrimental to the investor.  We all know that diversified portfolios that are prudently invested in multiple asset categories will get you great returns over the long term.  It was at this point of the article that i started thinking, why would anyone write this article and put so much fear into investors.  Then I read this.

“He says those who position themselves accordingly beforehand could have the opportunity to earn millions through specific “decline-related” investments year after year, over the next decade as well as maximize the next long-term “boom cycle,” which he predicts will begin between early 2020 and late 2022.  The controversial video, initially released to a private audience, has gone viral as hundreds of thousands are seeing new evidence for a looming economic crisis, and are heeding Harry Dent’s advice to survive and prosper.” 2. 

Wow, that is the worst investment advice ever given.   Harry Dent is in the business of making money off of peoples fear and greed.  The more fear he can put into the investors, the more money and fame he will get.

I advise you to stay away from the fortune tellers of Wall Street.  Nobody, especially Harry Dent, has a crystal ball.  Don’t fall for the headlines that are only there to sell you on emotion of fear.  Fear is a powerful emotion that can take over an investors mind.  Don’t let it.

By Jimmy Hancock


1. Matson Money. MOM Powerpoint. Mason, OH: Matson Money, 9 Jun. 2015. PPT.

2. Economy & Markets Daily. “Economist Predicts: “The Greatest Stock Market Collapse since the Great Depression”.” Economist Predicts: “The Greatest Stock Market Collapse since the Great Depression”.Economy & Markets Daily, 8 June 2015. Web. 09 June 2015.