Straight to the Point!
Those of you who have faithfully followed my postings already have a pretty good idea where this is going. The middle class in this country are an endangered species! Unless you live on another planet, you know that the cost of everything is going up. Latest example being gasoline/ heating oil. This on top of food prices that seem to creep a little bit higher every week, or the trick they think they’re getting away with….smaller sizes for the same price! The vast majority of us haven’t had a raise in a couple of years, or if we have, it’s not enough to get us ahead. Raise your hand if you feel like you’re doing better now than you were a couple of years ago. I have a strong suspicion that there aren’t too many hands in the air.
Historically, public works sector employees have maybe not done quite as well during the good economic times. Over the past decade or so however, their seemingly “protected” status has come to be seen as enviable. While their salaries might not be the highest, their benefits packages along with raises most years look downright juicy to many who have done without for quite a while now. With todays emphasis on budget deficits, people are starting to look at putting some of those on the bargaining table. What we’ve seen in Wisconsin, along with some selected state capitols, is the beginning of this debate. How we handle it as a country will go a long way toward determining whether we get through these challenging times as a united nation, or just one more thing that splits us apart. I am not here to opine one way or the other on this debate, but only to point out that there is a good likelihood that changes are going to be hitting the remaining sector of the economy that up till now has been the recipient of fairly lucrative benefits packages, and one where retirement investment decisions were made by people in the “industry”. Thus, this group of workers will be jumping into the pool of investment choices with the vast majority of the population.
It is here where I truly am frightened by the future. The investment industry is very adept at handling people with lots of investment dollars. When it comes to handling the funds from the rest of us, well….the history is not so good. Buy and Hold has been their mantra for decades. That allows them to hold onto assets, which just happens to be the way their income is derived. Never-mind that it has resulted in nearly wiping out peoples accounts twice over the past 10 or 15 years. Let’s also remember some of the mutual fund companies throwing the interests of their fiduciaries under the bus in the scandals of the 2000’s that lots of people know nothing about (try googling mutual fund scandals in the early 2000’s). This is all in addition to the scandals of Worldcom, Enron, Tyco and the grand-daddy of them all, Bernie Madoff!
Your only recourse to all this is to take control of your own destiny. Educate yourself enough so that you can either control your investments directly, or sound intelligent enough when speaking to the industry so that they don’t see you as an easy mark (or know when you’re being fed a line). If you would like to explore how to do this, I invite you to send me an email, or call me at the number listed on the contact page.