Why Investors Need to Stop Distrusting Wall Street

Ted

FYI: GUS SAUTER: A couple of weeks ago, I went to the barbershop. As he was cutting my hair, my barber said that he believed the stock market was rigged, he didn’t trust it, and he wouldn’t invest in stocks.

Since I spent more than 25 years encouraging people to save and invest, I was disappointed to hear this expression of distrust of investing. More disconcerting is that many people, and perhaps a majority, feel this way. The financial crisis and a number of one-off fraudulent scoundrels have provided fuel for politicians and the media to attack Wall Street and create this feeling of distrust and even anger toward Wall Street.
Regards,
Ted
http://blogs.wsj.com/experts/2016/01/11/why-investors-need-to-stop-distrusting-wall-street/tab/print/

LewisBraham

Think of it this way: You've worked your entire life at a job or a career if you hopped around. Then you're expected to trust your retirement--your golden years--to the stock market--something the best experts on the subject admit is a random walk. If you're lucky you do well as the market is rising when you retire. If you're unlucky and retire during a terrible crash, you're broke or at least struggling. Either way, the situation is largely out of your control. Meanwhile money managers collect their tolls on your assets regardless whether the market rises or falls. It's a heads I win tails you lose scenario.

There is something grotesquely unfair about that for someone who has worked their entire life and just wants now to rest and enjoy their remaining few years. This is why when I hear politicians saying Social Security should be invested in the stock market, I laugh. People are right to distrust Wall Street.

Yet I recognize Sauter has a point in the country we live in. That country is one where there isn't a strong social safety net and interest rates are near 0%. So the stock market is the only game in town. And for most people who don't have the time or ability to find good money managers, index funds are often the best way to go. They are the only way to prevent Wall Street from extracting its pound of flesh from their retirement funds.

Mark

Shucks! The title of the article had me thinking is was something from The Onion.

heezsafe

Good doggie, Gus. You should get an extra tasty biscuit in your bowl for this one.