Harry Dent: Market Crash Coming This Year; 'Hottest' Stocks Could Drop 99%

His chief message: Sell stock and invest only in the safest bonds.

Over the years, some of Dent’s predictions have been on the mark, most notably Japan’s 1989 bubble bust and recession and the populist movement that swept Donald Trump into the White House in 2016. The record also shows that many of Dent’s predictions have not come to pass.

As for the current environment, he maintains that Trump’s tariffs will “help trigger a recession, [although] the downturn in the economy would have happened even without the tariffs. But it’s going to look like he caused it. He’s sowing his own demise.”

In the interview with Dent, whose HSD Publishing produces monthly newsletters, some complementary before a paid subscription, he forecasts that “Tesla, Nvidia, bitcoin — the hottest things — are going to be down 99%.”

Here are highlights of our conversation:

THINKADVISOR: Do you still think “the crash of a lifetime,” as you call it, is approaching?

HARRY DENT JR.: Yes. The fireworks have already started. The danger is for the downside. It’s showing initial cracks. It’s going to take at least into the summer to see if this keeps up and we break at some key levels.

This is a once-in-a-lifetime or a once-in-40 years event.

What leads you to think that?

The markets are overvalued. It looks like the stock market’s major indices have already peaked. Let’s be cautious because this thing has been stretched five years longer than it should have, according to my [demographic] research.

I don’t think the risk warrants being in the market right now. If the crack gets worse in the summer, I’ll be saying, “Stay out and maybe get back in again.”

What’s responsible for the huge crash you foresee?

We’re going to get the biggest ass-kicking in history because we’ve been living off totally artificial stimulus.

I’ll be happy if I’m wrong and get sent to hell and hang out with the devil.

But the economy should never have boomed this long; the stock market should not have gone even half this high. They goosed this thing with too much stimulus.

You can’t run an economy on 100% artificial stimulus for 16 years and not expect a bubble. And now we have bubble No. 2. That has never happened in history. This is obvious, yet no one sees it.

What are you telling your newsletter subscribers?

Be cautious. This is the longest we’ve ever gone without a recession or major crash since the stock market was created. I don’t count what happened during COVID; it was just a short thing and an outside event.

What else is pointing toward the meltdown you predict?

It’s 100% clear to me that we’ve had a second bigger bubble totally from artificial stimulus. It’s from the government — not people getting giddy because the economy has been booming a long time.

The odds are that this bubble is going to start bursting this year. People will think it’s a correction at first. Then it will go deeper. And the next thing you know it’s going to be the crash of a lifetime.

What should advisors be telling their clients now?

This is not the time to rebalance. You have to get safe. Anything you put your money in that’s not safe will go down. If you put it in gold, it will go down only 50%. But if you put it in a high-tech stock, it will go down 90-some percent.

You don’t come back from a 99% [drop]. You have to make a million percent to do that.

So get the hell out of the way! That’s the only solution. We have an everything bubble, and that’s never happened before: everything bubbling simultaneously.

It was 100% created by the government and has to be flushed out.

What do you specifically recommend that investors do?

People have to protect their assets: Sell them and get into something safe. Gold holds up in the early part of a downturn but eventually goes down.

It’s a decent place to be, but the only thing that won in 2008 [financial crisis] was Treasury bonds. They went up 40% while everything else was down 50%, 60%, 70%.

So [don’t invest] in anything other than the safest bonds: triple-A corporate or Treasury bonds. Treasurys are better because the government can print money to pay its debts if they have to. They won’t let those bonds default no matter what.

They’re the ultimate safe haven when stocks, real estate and even gold are going down.

If you buy 10- and 30-year Treasury bonds, you can make money in the downturn instead of just preserving it.

[After the downturn], you reinvest in the normal assets: stocks, real estate [and so on] because they’ll be attractively priced and all the risk will have been taken out.

Are you saying that investors should time the market?

Yes. You wait until [most things] fall. Tesla, Nvidia, bitcoin — the hottest things — are going to be down 99%. [You can predict that by] looking at the [statistics] from the financial crisis.

What’s the probability that a U.S. recession will hit soon?

There are a lot of signs; a lot of leading indicators are pointing to a recession.

I would rate the chances of not having a substantial recession in the next four years as close to zero as you can get.

President Trump stated the other day, “I’m not ruling out a recession.” What was his purpose?

I think his advisors are saying, “Look, Donald, you’d better have a little backup plan here.” He walked in telling everyone, “I’m going to make America great again.” But every day the downside grows, and the upside shrinks.

What are your thoughts about his instituting tariffs?

They’ll help trigger a recession, but tariffs aren’t going to be the reason. This economy doesn’t need tariffs to fall apart.

There just needs to be no more escalating stimulus. If [Trump] had just walked in and did nothing, the downturn would still have happened.

The economy is likely to fall apart anyway, but he’s going to get blamed for it.

He’s fighting trade even with our partners. He’s pissed off everybody, and it’s going to look like he caused the downturn. He’s sowing his own demise.

How much will a recession hurt America?

Recessions are good. They’re as important as booms. Recessions are when we clear out the deadwood and restructure and reinvest.

If you don’t have a good recession once a decade, you’re going to have an economy that starts losing steam because it loses innovation and meanness and leanness.

It takes a kick in the ass [to re-ignite all that], and that’s what a recession is.

What should financial advisors be telling their clients, who are worried and anxious?

Tell them exactly what they don’t want to know. Eighty percent of the time the right thing to do when there’s a correction is to hunker down a little, reallocate a little for the future and sit through it and come out the other side.

But this time, if you sit in it, you’re going to lose all your wealth and you won’t have any extra money to buy anything back when it’s the sale of a lifetime one to three years from now.

People need to protect their long-term gains in real estate, stocks, crypto.

If I’m even half right, you’ll get everything back much cheaper in two to three years.