Breaking the Myths of Investing with Science

The mythology of traditional investing can leave investors confused and frustrated, lacking confidence in their long-term investing strategy. Without a clear investment approach – and a coach to help investors stay disciplined – investors can make potentially destructive decisions that can limit their potential and disrupt their peace of mind.

Investigating the myths of investing can be a powerful gateway to becoming a prudent investor by discovering the empirically tested academic investing principles available which can cause a potential breakthrough in the investing experience.

Myth: If I choose the right stocks, I will do well in the market

Stock picking is deeply embedded in our culture as the default belief of how investing works. From magazine headlines to conversations with friends, colleagues, and even some financial advisors, people are eager to endorse particular stocks, believing they will fair better in the market than others. It is a widespread phenomenon that lacks proven merit. The reality is that neither investors nor advisors are in control of or can predict how an individual stock will fair. “I’d compare stock pickers to astrologers, but I don’t want to bad mouth astrologers,” said Eugene Fama, PhD and Nobel Laureate in economic sciences. “The research shows that it is impossible to pick people who can beat the market.”1

Myth: I’m going to stick with stock XYZ because it has done well for me in the past and will continue to be the best choice for my future

Track record investing is the use of performance-based history to determine the best investments for the future. While there may be value in examining how a product or service has done in the past, it is not a reliable method for investing. From 2001-2010, the top 30 US Equity Funds’ average annual return was 15.83% compared to the annual return from 2011-2020 of 6.32%.2 American Economist and Author Burton Malkiel said, “I have become increasingly convinced that the past records of mutual fund managers are essentially worthless in predicting future success. The few examples of consistently superior performance occur no more frequently than can be expected by chance.”3

Myth: If I can get in and out of the market at the right time, I can play the market to my advantage

No one can predict the future. “All of the knowable and predictable information is already in the price today,” says Mark Matson, Founder, and CEO of Matson Money. “Stocks are forward-looking. The market is forward-looking. It is only the unknowable and unpredictable things that change prices moving forward.” It is fundamentally impossible to predict the market and therefore potentially dangerous for investors to try to time the market to their advantage.  “The evidence on investment managers’ success with market timing is impressive – and overwhelmingly negative,” said Charles D. Ellis, founder and former managing partner of Greenwich Associates. 4

Myth: All investing is gambling.

With recent trends promoting the gamification of investing and do-it-yourself investing platforms on the rise, investing today may feel more like an unnecessary risk than an educated decision around your family’s financial future. But, there is an alternative to these potentially dangerous investing strategies: an academic investing approach. The Matson Method is an investment strategy based on empirically tested academic investing science and is a disciplined approach that seeks to capture market returns while managing market volatility. The Matson Method – in addition to working with an advisor coach trained in human behavior science – can help investors create and stick with their long-term investing strategy.

What do investors do next?

Matson Money is committed to transforming the financial industry with cutting-edge coaching programs, innovative training, and lifelong educational systems that can leave people in action with a new and profound relationship to purpose, money, and investing. Register now and join us for our two-day virtual event, The American Dream Experience Gold, this July 21-22, and get the coaching, training, and structure that can give you confidence in you and your family’s investing strategies.


(1) Retrieved June 6, 2022 from

(2) Past performance is no guarantee of future results. Mutual fund data provided by CRSP Survivor Bias Free Mutual Fund Database, includes funds that are U.S. Equity mutual funds.  The S&P data are provided by Standard & Poor’s Index Services Group.  CRSP data provided by the Center for Research in Security Prices, University of Chicago. Indices are not available for direct investment, therefore their perform anecdotes do not reflect the expenses associated with the management of an actual portfolio.. Not actual investor results.

(3) Malkiel, Burton. A Random Walk Down Wall Street. 2003. p.374.

(4) Ellis, Charles D. “Investment Policy -How to Win The Loser’s Game”1993

Matson Money, Inc. “Matson” is a federally registered investment adviser with the Securities Exchange Commission (“SEC”), which has been in business since 1991.  Registration with the SEC does not imply their approval or endorsement of any services provided by Matson. This presentation is based on the views of Matson.  Other organizations or persons may analyze investments and the approach to investing from a different perspective than that reflected in this presentation.  Nothing included herein is intended to infer that the approach to investing discussed in this presentation will assure any particular investment results.

This article is based on the views of Matson Money, Inc. Other persons may analyze investments and the approach to investing from a different perspective than that of Matson Money. Nothing included herein is intended to infer that the approach to investing espoused in the article will assure any particular results. All investing involves risks and costs. No investment strategy (including asset allocation and diversification strategies) can ensure peace of mind, assure profit, or protect against loss. This is not an offer of sale of securities. The information contained on this advertisement should not be construed as financial or investment advice on any subject matter.

All investing involves risks and costs. The information contained in this material is for educational purposes only and is not intended as investment advice. No investment strategy (including asset allocation and diversification strategies) can ensure peace of mind, guarantee profit, or protect against loss.