No - AAA meant that 3 rating agencies *thought* they were not speculative. A credit rating is not a guarantee of any kind, it is an opinion. The balance sheets and publicly available information on these "AAA" securities clearly showed they were highly speculative. If you don't do your homework, you have no business investing in individual securities - stick to bank accounts, CDs, and government bonds. Making a mistake is not the same as lying. Ratings agencies thought the securities were AAA. They were wrong, but not deliberately so. Financial analysts can be wrong, just as doctors or lawyers can be wrong. In investment, you can avoid this problem by proper diversification between asset classes and securities. No one would have taken a big hit because of the AAA securities that turned out to be junk - they may have lost some, but not huge double digit losses.
I would be interested to know how many of these 50 and 60 somethings in the video actually went to an independent financial advisor and asked him to construct a low-risk portfolio for retirement. My guess is almost none of them, because no honest financial planner would ever recommend a 100% long stock portfolio, backed up by an over-leveraged gamble on the housing market. If any advisers did do this, then they should be sued. But the problem here IMO does not seem to be poor advice, it seems to be that people simply *did not ask for advice* from a professional advisor. If you don't go to the doctor, and instead try to self-medicate, it's your fault if you get ill and die from a curable ailment. Financial advice is no different - if you do it yourself, make sure you are at the same level or better than the professionals.
this is just a media blitz priming the public to get ready for the mandatory shift of retirement funds (ira, 401K, 403b, ect.., ect.. ect.....) into safe haven invstments like long term treasuries! Then we can watch as those account balances get inflated away in a hiddent tax but that will come, i think, after a crash in the bond market.
âLetâs hope we are all wealthy and retired by the time this house of cards faltersâ¦â - CNBC Faber report "House of Cards" I would agree that a lot of people didn't pay attention to their 401k's but Wall St ain't no saint in any of this.
Boy, you are cold Cutten but I agree, anyone who took big losses was gambling or just not paying any attention to their retirement. On the other hand I don't agree that financial advisors are like doctors. 90% of financial advisors I have met really have just been salesmen and didn't know what they were talking about, of the other 10% maybe half are were competent but act in thier own best interest rather than that of their clients. My experience in medicine has been the reverse, 80-90% are compentent and act in their patient's best interest, 20-10% don't care and give the rest a bad name. Medical School is a good filter for the something for nothing get rich quick con man crowd.
Iâm from that U.S.state where the couple wanted to retire in a cabin up north. I am retired and I will spend most of this summer in my cabin up north. Then in the fall I will be back trading my automation so I can eat mac and cheese and afford to save enough so I can pay the taxes to get back there next summer. But many others in my state are in far worse shape. They are not worried about 410ks but keeping a roof over their head. Any way⦠The real answer to 401ks or any money is to think for your self and not like one of herd. However, when you are in too much of a lather trying to work to make ends meet and wade through long rush hours this message gets lost to your ears. So they tune in to the 401kâs siren call and dump all of their money in mutual funds. But mutual funds are not a new concept â just a different packaging. Society has built some fancy facades for money throughout history. These behemoths in the mutual fund industry are no different than the bucket shops in Reminiscences of a Stock Operator. They are a fancy front to relieve us of our funds while they state they will protect us from the markets wrath. The baby boom generation waited far to long to save. Many like those in the flick have meager amounts in bonds or stock. And now with ½ of that meager amount it appears paltry. They feel the system has lied to them and let them down. When the truth is they did not prepare to begin with and never understood what being part of the heard cost them.
Here's the difference between being a financial adviser and a doctor:Markets are zero sum. It is statistically impossible for more than half the money invested or not invested in a market to "out perform" the other. If you are 100% long and the market skyrockets your purchases were met by a seller who is now under invested. If you're 100% long and the market breaks you lose and the seller is whole. I've used this analogy several times. Let's assume Bill Belichick is the best coach in the NFL. So the 31 teams other than the Patriots "clone" Belichick. Now EVERY TEAM is coached by the "superior" Belichick. What is the combined record of 32 Belichicks at any point in the season? .500 of course. For every game Belichick wins "another" Belichick loses. So in a "bull market" while one class of investors are mopping up and retiring large another class of non investors see their purchasing power and access to assets diminished. Hence criticism of bear markets is elitism at it's finest. Think about it. When home prices were quadrupling-hell my house in Florida was worth almost forty times in 2005 what my grandpa paid for it forty years earlier-those gains were the equivalent of a modern Marie Antoinette saying "let them live in cardboard boxes." If CBS wasn't the poster boy for elitist, leftest cock sucking they'd DIG DEEPER into investment psychology. The "retirement battle" of the middle class is largly private sector workers vs. those unionized, big pension retirees who suck the tit of taxpayers and Big Brother. While Joe Plumber is forced to fund his own retirement, Tomika the Filing Clerk at the Commerce Department is secure in the knowledge that the day she quits after 30 years of non-performing service she'll retire on 75% of her last paycheck. 40k a year in the private sector often means a retirement of zero savings and reliance on Social Security which doesn't kick in until around the time you die. 40k working for Big Brother can mean 30k a year pension kicking in while you're in your mid 50's. CBS de facto FAVORS large government pensions. Why the tea parties? Because Middle America knows this is a CLASS WAR between public and private.
I don't agree with that. Markets have the ability to add participants and therefore are able to increase in size and value. That's like saying there is a fixed amount of wealth on this planet and even in 1000 years we will not have gained any wealth. It's ok to have a fiat currency for this same reason: knowledge is wealth, and the only way to keep things moving forward is to keep the ebb-and-flow of the markets.