Why Your 7% Guaranteed Annuity Will Destroy Your Financial Future! Free eBook...

Download It Now!

Get The Free eBook

Download

Get The FREE 4 Part Guarding Your Wealth Video Series

Watch The Videos Now

Get The Free Videos!

Independent Review of Harry Dent’s Predictions | With Financial Advisor Jeff Voudrie

Independent Review of Harry Dent’s Predictions | With Financial Advisor Jeff Voudrie

Independent Review of Harry Dent’s Predictions | With Financial Advisor Jeff Voudrie

If you have received a recent email from Dent Research warning of a stock market crash in the second half of 2013, do not panic. Here is an independent review of Harry Dent’s predictions that takes an objective look at this popular financial prophet. (Dent’s latest book is “The Great Crash Ahead: Strategies for a World Turned Upside Down.”

The email claims that Dent has predicted “nearly every major economic trend over the past 30 years,” then names a few of the many trends that have occurred over the past three decades. The message goes on to say that the Dow will crash to 3,300 within the next seven months.

All of this dire warning is intended to prompt you to abandon the stock market if you hope to “restore your retirement plans.” It then directs you to listen to a personal message from Harry Dent if “you have any hope of retiring,” citing Dent’s “near-perfect track record of predicting economic events decades before they occur.”

Independent Review of Harry Dent’s Predictions By Financial Planner Jeff Voudrie

Sounds convincing. What are the facts?

1. Dent has been spectacularly wrong in the past.

Although his emails won’t tell you that. He predicted in 2006 that the Dow would hit 40,000 by 2010, along with a “great boom”” that would run from 2007 until early 2010. He then predicted a market correction after this explosion, which anyone could have done. Of course the market would simmer down after hitting 40,000, which it never approached. Dent was far from reality on these predictions.

2. On the other end of the spectrum.

Dent also predicted that the S&P 500 would fall 30-50% in 2012, when in fact it ended up 13.4% in 2012. This should give us caution when we ruminate over Dent’s latest prediction that the Dow will drop to 3,300 within the next half-year.

3. Dent has had two exchange-traded funds shut down in the past several years.

Both of these funds were based on the hallmarks of Dent’s research: broad trends in the global economy combined with extensive demographic analysis. The DENT Tactical ETF (DENT) was closed in August 2012 after falling 12.9% over the nearly three years of its existence, in contrast to the Vanguard Total Stock Index Fund (VTI), which rose 42.7% during that period . Comparable funds gained between 5 and 43% during that same period. A mutual fund known as the AIM Dent Demographic Trends merged with another mutual fund and hit $2 billion in assets before losing 80% of those. Dent said the fund did not take all of his advice and suffered for it.

4. While Dent has been praised as a very smart man, intelligence alone does not guarantee accurate predictions regarding the stock market.

Lots of smart people are wrong when they begin making predictions in this area, particularly in today’s volatile economic climate. Just because Dent has two New York Times bestsellers does not mean that he has been correct more often than any other pundit.

5. Dent draws on mounds of data based on past performance of the market in light of demographic trends.

There is certainly some merit for this approach, but the past is so limited in the history of stock markets that it can be very difficult to predict the future from it. The sample size is limited, and almost all other financial experts believe that other variables should take precedence over demographic data when making predictions about the market.

The conclusions to draw from this independent review of Harry Dent? Here are a few:

  • Great research does not mean that you can beat the market. Any guru who claims to be smarter than the market should not be trusted, no matter how logical s/he sounds.
  • In today’s market more than ever before in history, recent past performance does not indicate future performance. A fund can thrive for a time then plummet. Even Dent’s have.
  • Charts and graphs can be found to say just about anything that you want them to. Dent has used them masterfully to draw correlations between economic performance and demographic trends. Do those two always feed each other? No, no matter how many graphs are packed into each book.
  • Any time one man says the Dow will go below 4,000 in the next seven months while the bulk of the financial advisor world says it should be around 10,300, beware. If you want to put that much stock in one outlying voice, that is your right.

Take a look around at other independent reviews of Harry Dent before you buy all of his books and sell all of your stock. Most financial experts see Dent as more of a master marketer who makes outlandish predictions to gain publicity, rather than someone you should trust for solid financial advice.

“There are many private money managers and financial planners that rely on systematic processes and hard work day-in and day-out that have a track record of success in both up and down markets,” says Jeff Voudrie.

In this business it seems that those that can, do whereas those that can’t write newsletters.

 

.

About the Author

18 Comments

  • curls July 26, 2015 at 3:42 pm

    Thanks! I received one of those emails and thought – if someone had been right that much, everyone would be following him and his name would be a household word because of it. I went searching to see what his record is! So now back to my actual investing planning — and no more time wasted on Dent. Thanks for info that helped with that!

    • Observation September 8, 2015 at 4:25 pm

      In fairness, Dent has been talking about this recent Market “crash” since early June 2015. No one is 100% right all the time, but mistakes do not mean they are 100% wrong all the time either.

  • jeff October 2, 2015 at 10:51 pm

    Thank you for this obvious unbiased and informative review

  • T Apgar November 23, 2015 at 5:10 pm

    Thank you Jeff for offering a clear headed view of Harry s Dent. It doesn’t take much research to expose someone who either believes his own prattle or is just someone who who will say anything to sell his alarmist books to the unwary. He is very convincing and I suppose he could turn out to be right that there will be a mega collection one day. Who can know for sure.

  • Richard January 3, 2016 at 9:45 pm

    I am tired of reading the BS opinions that come from both sides of this coin (i.e. the market will crash predictors VS the market will continue to do great predictors).

    Every year, there are “experts” who are divided by their arrogance in either believing the market will continue to go up VS the market is now a bubble and is posed to crash.

    The fact is both are right and both are wrong (for a season). The reality is “markets” go up and they go down (2001 and 2008 are great example of market bubbles bursting).

    Where these talking heads get it wrong is in trying to predict the timing. Never, never, never try to time any markets. Markets are seasonal, just as weather patterns are. None are predictable in terms of setting dates for crashes.

    • Jeff Voudrie Author January 18, 2016 at 3:51 pm

      Thanks for sharing your thoughts Richard! It is true that it is virtually impossible to state with certainty exactly when a crash will happen. As a financial advisor, though, I look at it more from a cycle and probability perspective. For instance, the best time to invest in stocks is after the markets have fallen significantly (like in 2002 and 2008). On the other hand, it doesn’t seem as good of an idea to pour a lot of new money into stocks 7 years into a rising market when the underlying economy is slowing. There are cycles that will take months (or years) to play out and in my opinion, this is a time to focus more on capital preservation as opposed to growth. That’s why I generally moved my clients out of equities several months ago.

      Thanks for the great comment and let me know if I can be of help.

      • Angela January 11, 2017 at 3:16 pm

        If you move it out where do you move it to so its safe? The million dollar question 😉 Until the next crash when you move it back in?

        I’ve just started reading books, am new and only have 30k in 401k but don’t want to lose it. Ya know 😉

      • John March 5, 2017 at 1:27 pm

        You describe Harry Dent quite accurately. There re many of these “book sellers – the Crux, Stansberry, Money Morning, Ron Paul, to name a few more – someday they will have to be right, as you say in your article, markets fluctuate. But the scare tactics of these marketer’s can lead some people to make ill timed decisions. As you say in your article, never try to time the market. My view is to buy solid companies that are well positioned in their market segment and then be patient…. as many say, money that is to be needed soon should not be in the market… thanks for your objective comments…

  • Daniel January 6, 2016 at 1:06 pm

    Thank you for that review. It was thefirst time I was exposed to his work, and from what I see he is just another “guru” making a lot more money selling his advice than from investing itself. Great work Jeff!

    • Jeff Voudrie Author January 6, 2016 at 1:31 pm

      That is a pretty good assessment! I’m happy to answer any questions you have about investing in these troubled times!

  • Jim Alexander January 18, 2016 at 2:56 pm

    Where are the “real” experts? Are there any “real” experts? I am no longer sure if anyone knows what is going to happen. A few days ago the experts said not to worry …. A slight correction …. Then it was down again …. And down again. Today is a holiday, let us see what tomorrow brings!

    • Jeff Voudrie Author January 18, 2016 at 3:45 pm

      Jim, I agree that when you listen to the popular Wall Street peddlers you can quickly become disillusioned! Frankly, I had to turn off certain ‘business’ channels several years ago because they weren’t providing any real value to my investing process. In fact, they were having a negative impact because it ended up being noise that I had to then screen out. In order to understand why things are the way they are you have to look at how people get paid. When a ‘news’ channel is paid by advertisers that depend on a ‘bull’ market (such as mutual funds) then it is in ‘news’ channel’s best interest to spin any news as positive and a ‘great time to invest’. Think about it–if a ‘news’ channel came out and said the economy is slowing and the markets are likely to be in a downtrend for the next 6 months the big mutual funds that depend on a rising market probably won’t keep advertising on that channel! And heaven forbid if the channel tells the truth that most investors should probably be in cash right now instead of stocks–none of their advertisers would stick around!

      That doesn’t mean that there aren’t good sources of real market research. In fact, I have developed several trusted resources over the years and have incorporated them into my process. That actionable intelligence and quantifiable data is what led me to move almost entirely out of stocks mid 2015. So, generally, my clients have been spared the carnage of the last several weeks.

      Feel free to contact me and we can set up a time to talk personally. I would be happy to share some what I am doing and why and to offer some suggestions on how you should proceed.

      • Norbert January 22, 2016 at 5:33 am

        Jeff,
        What about bonds? the junk bonds behave like stocks and their value go down as fast as stocks in time like now. They still generate the income but have greater risk of bankruptcy.
        What do you think and what is your advice?

        • Jeff Voudrie Author January 22, 2016 at 12:52 pm

          It helps to realize that different types of investments behave differently depending on the part of the economic cycle we are in. For instance, high-beta growth stocks are going to do well in the beginning of a growth phase and at the very end of the growth phase (because they are the few that can still show earnings/growth during late cycle…until they start to crash!

          When the economy is slowing it makes it difficult for companies to keep growing profits. IF profits stop growing that means they will probably starting shrinking. If you have a lot of debt and your income starts decreasing your probability of defaulting goes up. That’s why junk bonds and even investment-grade corporate bonds are something to be avoiding right now. In a recessionary/deflationary cycle US Treasuries and/or muni bonds will perform much better than junk and corporate bonds.

          Great question!

          • Norbert January 22, 2016 at 7:55 pm

            Thank you much.

          • Ted August 22, 2016 at 3:42 pm

            A broken clock is right twice a day…so goes Dent.

  • Norbert January 22, 2016 at 7:55 pm

    Thank you much.

  • Ryan February 12, 2016 at 1:02 am

    He does have a very informative explanation regarding demographics…ignore the stock predictions for a minute. ..the boomers (like my parents) are now in their final home – many downsize. I see home building going on like crazy here in the mid-south & southwest…and many are boomers leaving the rust belt. Where are the new young turks that will buy up that real estate in the rust belt?
    The demographic trends regarding companies owning the markets of new technologies are also sound.
    Timing the market on the other hand is never a great idea.

Leave a Reply

CAPTCHA