Chart of the Week: Should We Trust Investing "Experts"?
From Retirement Field Guide, comes a chart showing the stock chart for an S&P 500 ETF (which tracks S&P 500 Index) from 2012 to present with quotes from noted pundits.
Click on the chart to get a larger version that is easier to read:
Questions:
- How much has the S&P 500 risen over this period?
- Why do you think that so many experts may have been expecting a crash in 2012? (Hint: what happened a few years earlier?)
- What is it about the stock market that makes us susceptible to taking advice from these "experts?"
- Despite all of these predictions, these "experts" continue to pop up on financial news stations. Why?
- What might you tell a friend who tells you "Who would want to invest in the stock market? I heard this guy on the radio talking about the crash that is coming..."?
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Check out our Data Crunch resource for more charts/graphs for your students to analyze.
About the Author
Tim Ranzetta
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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