The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails

The Next Crash

Perhaps the next financial crisis will occur in the foreign exchange market that is increasingly trying to lure investors with promises of quick riches. Maybe the next crisis occurs in the futures market where some brokerage firms are trying to persuade investors to invest in gold and silver futures to diversify into different asset classes. Maybe the next crisis occurs in the municipal bond market or in the fast growing exchange-traded fund industry. Perhaps the next crisis occurs in some area of the financial market that has yet to be invented by Wall Street’s financial engineers. All that is certain is that another crisis will occur. It will occur someplace unexpected. It will hurt many people, many of whom can ill-afford to be hurt again by another financial crisis. Those people will be hurt the worst. They will be lured to buy just before the game ends. They will hold on throughout the worst of decline, hoping for the stock market to bounce higher so they can at least break even. But that will not happen when they most want it, or need it. This will panic them and they will sell right at the bottom just as the stock market readies to advance. That sad dance is well documented. Still, it persists.

Before the next crisis redistributes much of the nation’s wealth to the few, Washington needs to use its mighty bully pulpit to start a conversation with the country about investing that people can understand—rather than speaking at people through securities laws that ...