How integrity has vanished from Wall Street
By Cal Burgess
Retirement Servicing Group PLLC
I saw a disturbing article last week, “Stocks hold gains as market looks to the Fed.” Really?? Whatever happened to the free market? When did the word integrity get erased from the investor’s vocabulary?
Let’s face it, the whole “if anyone can the Fed can” mentality is wearing thin on our country. Instant gratification from a bear market is the main reason for the hopes of another federal stimulus. Yet, just like any situation in life, instant gratification will rarely yield favorable long term results.
When the Fed pumps billions of dollars into the market hoping to sustain positive results, eventually that money will have to be accounted for. Year to date (since 2008) there has been well over $3 trillion (almost 20 percent of our Federal deficit) printed in order to stimulate the economy. How has that worked out for us?
We know that Standard & Poor's downgraded our federal credit rating and that we have not sustained any of the growth that was anticipated by the federal stimulus. Furthermore, the outlook of our country’s financial future is negative. So when the market takes a dive, Wall Street hopes to rally on the Fed printing more money?
More importantly, why is the Fed’s problem your problem? In other words, why is your portfolio taking a hit when your money could easily be exempt from all future market risk?
Imagine for a minute if you were able to skip over the market crash of 2008 and were able to avoid all the market volatility since then. With the Dow Jones today at just under 11,000, your money would have reflected a Dow Jones result of over 16,000 due to annual reset and market upside potential.
These safe money solutions provide guarantees that most portfolios fail to offer. In fact, over the last decade some safe money solutions outperformed the S&P 500 by up to 400 percent (average rate of return). In life we live by rules like “look both ways before you cross the street” not “call 911 to stop traffic and run across the street.”
As anything else in life, when you take a logical approach to your money, you can yield favorable results.