Aftershock: Protecting Yourself from Books That Promote Fear
By Ric Edelman
They call out to you from bookstore shelves and Amazon.com’s homepage, promising to help protect you economically while the financial world comes to an end. Warning of crashes, collapses and meltdowns, they lure you in with their siren song only to steer you into the rocks.
I’m talking, of course, of the mountains of newly published books predicting major market crashes and other economic calamities. At least 16 such books have been published since the markets began melting in 2008 — and I can confidently tell you that they are all ridiculous.
How do I know this? As the host of national radio and television shows, and a best-selling author myself, publishers constantly send me advance copies of soon-to-be published books, hoping I’ll write a testimonial for their back cover or promote them on the air. Over the years, I’ve read hundreds of these books.
And, I’ve discovered a pattern: When times are good, books proclaim get-rich-quick tricks. And when times are bad, the books predict the end of the world.
Many of these books hit the bestseller lists for a short time, but they quickly fade away, never to be heard from again. The reason: The advice either doesn’t work or doesn’t work for long. Their data is lacking, their premises are flawed and their conclusions are wrong. But the authors don’t care because they’re busy getting rich selling their books on the talk show circuit. Today’s titles include:Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown Crisis Economics: A Crash Course in the Future of Finance
The Dollar Meltdown: Surviving the Impending Currency Crisis with Gold, Oil, and Other Unconventional Investments
How An Economy Grows and Why It Crashes
Profiting From the World’s Economic Crisis: Finding Investment Opportunities by Tracking Global Market Trends
The Great Reflation: How Investors Can Profit From the New World of Money
Freefall: America, Free Markets, and the Sinking of the World Economy
Why are these books just now reaching bookshelves? Because you wouldn’t buy a book right now that’s called Invest in Stocks Today Because Everything Will Be Fine.
Consider the bull market of the late 1990s, when tech stocks were all the rage. New books being released back then included:
Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market
How To Make the Stock Market Make Money for You
Midas Investing: How You Can Make At Least 20% in the Stock Market This Year and Every Year
Stock Market Miracles: New, Innovative and Powerful Ways to Make Your Money Work Wonders!
When to Sell: Inside Strategies for Stock-Market Profits
Trading to Win: The Psychology for Mastering the Markets
100 Ways to Beat the Market
We all know what happened next. In 2000, the stock market began falling, and over the next three years, the Dow Jones Industrial Average fell 45%. Those get-rich quick books were cleared from the shelves to make room for new books that predicted financial destruction. In 2002, new titles included:
The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away
Rich Dad’s Prophecy: Why the Biggest Stock Market Crash in History is Still Coming…and How You Can Prepare Yourself and Profit From It!
The Inefficient Stock Market
Stock Cycles: Why Stocks Won’t Beat Money Markets Over the Next Twenty Years
Blind Faith: Our Misplaced Trust in the Stock Market and Smarter, Safer Ways to Invest
Anyone who implemented the strategies touted in those books was probably shocked when the “biggest stock market crash in history” didn’t come. Instead, beginning in late 2002, the stock market recovered, and the Dow rose 80% from 7850 to 14,090 by October 2007, according to Yahoo! Finance.
And during this same period — 2002 to 2007 — real estate prices doubled. Publishers wanting to cash in on that trend fired up their presses, releasing these titles:
2 Years to a Million in Real Estate
FLIP: How to Find, Fix and Sell Houses for a Profit
Financing a Millionaire Real Estate Investor
Confessions of a Real Estate Entrepreneur: What It Takes to Win in High-Stakes Commercial Real Estate
Investing in Duplexes, Triplexes and Quads: The Fastest and Safest Way to Real Estate Wealth
The Complete Guide to Investing in Real Estate Tax Liens & Deeds: How to Earn High Rates of Returns – Safely
How to Make Money With Real Estate Options: Low-Cost, Low-Risk, High-Profit Strategies for Controlling Undervalued Property…Without the Burdens of Ownership!
Find It, Fix It, Flip It: Make Millions In Real Estate -- One House at a Time
We all know how that turned out.
All these books have one purpose: to exploit your sense of greed or fear by fixating solely on current events and the recent past, and telling you that this is the way it will always be. During boom times, they exploit your desire for profits, and in bad times, they exploit your desire to avoid losses.
Stay away from such hype. After all, if these authors were so busy getting rich doing whatever it was they were telling you to do, why would they bother trying to get rich by writing a book about it? The truth is that many of those authors don’t follow their own advice — and with good reason.
So ignore these titles. Instead, seek books that teach you how money works (rather than those that make predictions). Once you have the education and information you need, you’ll be in a better position to make wise financial decisions that are in the best interests of you and your family.