Exactly! When I go sit at a blackjack table I understand there is risk of losing money. I also have a reasonable expectation that the house is dealing with a legitimate deck of cards.
The law makers in Washington have assisted Wall Street in this grand scheme. Lets make a ton of money off the backs of the average hard working Joe. So whenâs the Revolution?
Thank you. At least when I'm getting screwed in Vegas, they at least pretend to have a diligent and active gaming enforcement unit to ensure the casino isn't cheating.
If GDP triples, almost everyone in each decile of wealth is better off than if GDP had stayed flat. Yes, the top 10% will still be richer than the bottom, quite possibly by even more. But the other 90% are still much better off.
Most of the people in the video and elsewhere did not lose 50% in 18 months because they were being overcharged by 1% per annum. The vast majority of the losses are their own fault. I think pretty much everyone agrees that negligent or deceptive "advice" and marketing is wrong, but that wasn't the main focus of the video, and that isn't what has wrecked the savings of so many people in this slump. Furthermore, it is the individual "investors"/gamblers who went out looking for these funds. So many professionals have recommended indexing and diversification there is no way anyone who isn't extremely lazy would not find it within 10-20 hours of starting their research about investment.
People invested in mutual funds with their 401k. The market has fallen from 14000k to 8000 k almost 50%. Unless the mutual fund they're invested in is super in investment return, then more then likely the common man has lost money in their 401k accts. Mutual funds act like the market, when the market falls in a deep recession, it falls too no matter what. What people should complain about is the lack of variety in investment choices presented by their 401k plan.
Is that true? I don't have a statistically significant sample, but I've used the services of 3 financial professionals and they were all extremely high calibre. I have used about half a dozen doctors and one was very good, the rest mediocre and lazy. Anyway, I can't comment on the general professions as I haven't surveyed it. If the quality really is crap, then they need to either start suing the hell out of people, or increase the qualification standards necessary - I would agree with you on that if it's true.
The stock market is positive sum to investors, so long as corporations make money. It is positive sum to the extent of the annual retained earnings of the corporations listed on it. If the stock market component companies are annually making a return on capital of 8% per annum (for example), then the long-term return will converge to 8% compound per annum. The bond market is positive sum to investors, to the amount of the interest paid to them. Even futures are positive sum if the risk-reduction benefits to hedgers outweigh the transactions costs - and clearly that is the case, otherwise there would be no demand for hedging. In a free market, people do not engage in economic transactions unless they perceive some benefit to them. Furthermore, investment decisions need to be made by anyone with any capital. The optimal decision is a function of their risk preference, financial needs, and the long-term risk/return prospects of each asset class. Any advice which can make investors decisions closer to the optimal allocation for their given preferences & situation, is by definition value-additive. This is true regardless of whether the stockmarket soars or collapses for the next 10, 20, 30 years. It is true regardless of whether markets are perfectly efficient or very inefficient. With a given market situation, it is still a necessary and very important task to match your investment profile with your risk tolerance and your estimated financial situation(s) now and in future. Poor advice, or no advice, has cost hundreds of millions of people between 30% and 100% of their life savings. It is a particularly strange time here in 2009 to claim that good advice would have made no difference to these people.