Sunday, August 24, 2008

Is Wall Street Ripping You Off?

Which end of the bull ..
market conspiracy investing
Cramer was venting recently about the unfairness of the Freddie/Fannie decline. His contention was the some people obviously knew something and were profiting from it while the average Joe was getting the short end of the stick. Then there are the conspiracy theories about how the Bear Sterns debacle was premeditated and engineered in favor of the powerful and well connected. As the sub-prime saga unfolds the role of rating agencies is starting to get questioned. In the pursuit to increase top line revenue did they forget what their purpose was? And might I remind you about the large scale collusion between bankers, analyst, traders, regulatory agencies and top notch executives which led to the collapse of Enron, WorldCom and Tyco.

The examples above are some instances that we know about, many others we never hear about. Systemic rip-off, exceptions to the norm, conspiracy - large or small - who knows. The more pertinent question is - what are the options?

A Bunch of Crooks
If you paint the whole financial system as rotten and run by crooks – you have no choice but to stay away. And that is a shame because there is money to be made by investing in the market – if you are financially smart and are willing to play the game.

Let’s Play the Game
You can make money in the market. People have done it and are doing it today. Average Joe’s like you and me. Reduce your risk, manage your greed and have patience. Reduce your risk by knowing what you are doing, diversifying and having a plan. Manage your greed by not falling for the get rich quick schemes. And finally have patience.

You Are My Friend
Give your money to Wall Street, your broker, your company, your brother-in-law and let them define your financial destiny. Some get lucky but most regret such blind faith. In my experience – no one cares about my money more than I do so the onus is on me to make it happen.

In the end if you learn to play the game you will make money. Stay away from the shenanigans and dubious schemes out there – because there is always something out there, which is too good to be true!

(Photo coutesy riclane/Flickr)

If you enjoyed this post, consider subscribing to a full RSS feed or get regular updates via email.

No comments: