I guess it was bound to happen. The ponzi schemes that have plagued investors in the cities (and even smaller towns) have struck Island Park. I won’t go into all the sordid details. If you like to get down in the mud and root around, you can get all the juicy detail from the finger pointers in the local media.
No. I think I’d like to take a more philosophical position on the subject.
I find it interesting how people will turn on someone they don’t even know without missing a beat. When a wealthy investor lets it be known he is getting 20% (or even 30% or 40%) return on his (or her) money, everyone say, “Wow! I wish I was such a savvy investor.” Then when it comes out the investor has been bilked out of all his money (you would put ALL your money into something giving you 40% wouldn’t you?!?!?!) in some underhanded, immoral and illegal scheme, everyone immediately does an about face and says, “Wow! How could he have been so stupid? Everyone knows you can’t get 40% return on your investments. How could he have been so greedy?” In one breath the person has gone from an astute, savvy investor to a greedy schmuck who somehow deserves whatever has happened. Of course the reaction is different for the widow who tried to emulate the “savvy” investor by putting her entire nest egg into the same investment. Nobody feels like she was greedy. She was just a huge victim in all this.
Don’t get me wrong. I don’t think anyone deserves to be cheated. I don’t believe anyone “has it coming.” I think they’re all victims. Some are, indeed, victims of their own greed. But more often they’re victims of some unscrupulous, charismatic, smooth-talking shyster who preys on the weak, the desperate and the unsuspecting. It has been so since the dawn of time and will be until the end of time. The names change, the rules of engagement change, but it’s still the same game — something for nothing.
At the end of the day, it’s probably true what your dad told you. If it seems to good to be true . . . .
These days investing is a crap shoot. The stock market just cost most of the many retirees here in Island Park about half (in some cases more than half) of their meager retirement. I don’t care who you are. If you just cut your assets in half, you’re hurting. I guess the good news for those people is they still have half. Those who got caught up in one of the many ponzi schemes making the rounds lately have lost everything. For some, they lost literally everything — house, cars, savings accounts. Starting over at 30 is tough. Starting over at 70 is so daunting as to be nearly impossible.
This is a good time to rethink your whole portfolio. It’s time to verify that what you think you have is what you really have. It’s time to decide just how risky you want to be on investments. Some are obviously safer than others. You are responsible for protecting you. Do your homework. Take nobody’s word for anything. In my businesses we have a phrase that guides everything we do — trust and verify. Yes we trust you. No, we don’t do anything without verifying. That’s good advice for investing in today’s market.