Last month I wrote a blog entry about people being unhappy with the return on their retirement accounts, and that it was causing food prices to rise. In that post I wrote:
"What I mean is this: Everyone, and I mean anyone, with dollars in a bank account is unhappy with the interest rate that banks pay on your savings. They're paying tenths of a cent per year. It's really tempting to anyone to get higher return, and a financial concern that can return 10 to 30% returns annually is considered to be attractive. "
Well, it turns out that not only are folks looking for higher return, they're getting sold products that are not returning any interest, but in fact losing the entire principal as well.
Folks, I don't consider your stockbroker to be your friend. If they approach you with some investment that is supposed to make a good return, ask them how much of their money is invested in that particular product.
A very wise man I knew, Irving Wolfe, would be regularly approached by brokers interested in handling his investments. He'd ask them for a personal financial statement, and an accounting of their investments, showing the returns that they were getting on their own portfolio.
He never got a call back.
Irving passed on a few years ago, but I still remember him telling me this story, and I thought at the time that it made a lot of sense. Irving ran his own mutual fund and picked his own stocks, and did very well with that for many years. I just don't have the time to spend on that, and so choose to avoid the securities market altogether, preferring land and direct equity in companies.
My opinion? Don't buy anything you do not understand completely.
Don't have any stocks, don't have a retirement fund, have a savings account but it is a joke because it never has anything in it. We use cash because we don't have money to use anything else, lol.
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