In [My Broker] We Trust

Wall Street Blues

Say you have a friend that has a job at a particular electronics store.  This friend is able to get you a special box that allows you to get free cable, including premium and pay-per-view channels.  For months you enjoy all the HBO that you can watch and all the money you saved.  Then one day you get a letter in the mail saying you have to pay a $5,000 fine or risk jail for theft and fraud.  It turns out your friend’s store got raided by the government and your information was on some paperwork when they mailed you your cable box. 

The question is, whose fault is it?  More specifically would you blame your friend for having to pay this fine or would you take responsibility for your role?

This seems to be a simple answer but with the anti-Wall Street talk, it seems that the cable box friend is getting all of the heat.  Since the recession took form in 2008 and millions of people saw their net worth plummet, it became fashionable to make all of those corporate executives out to be the enemy.  We accused them of deception and using unethical practices that set “Main Street” up for failure.

However, just a few years prior, stocks and real estate were at an all-time high.  Millionaires were popping up overnight and everyone swam in their money like the intro to Duck Tales.  But you didn’t hear any politicians complaining about the need to regulate the banks or brokers on Wall Street.  You didn’t have droves of people angry that CEO’s had private planes or that companies were recording record profits.  No one cared about all the risk taking and questionable financial decisions that were made.

Nope, you were too busy enjoying your free cable.

As long as you were making money, you didn’t care how it came.  You didn’t bother to read the fine print or take risk into consideration.  But as soon as that bill came due and the other shoe fell, you cried foul.  The truth is, you got greedy and then you got burned.  Sure Goldman Sachs deserves to be investigated for their role in this mess and the system needs more regulation but the people on Main St. need to make some changes as well.  We need to remind ourselves that you cannot get rich quick and any investment that you make can be lost.  Financial success takes hard work, focus and patience – there are no short cuts.

So take the time to learn about your investments and question all of the financial data.  Take control of your portfolios and protect yourself against unnecessary risk and liability.  Now, let’s just hope that you remember this when the market turns around.