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Thursday, July 2, 2009

Bernie Madoff

I'm tired of hearing about Bernie Madoff's "victims". Let me say first, that what he did was wrong, very wrong. He scammed a lot of people. But, he didn't force them to "invest" in his scheme. They saw a projected big profit and put all their money into it.

One of the first rules of investing is not to put everything you have into one thing. Diversify, diversify, diversify. Didn't anyone learn anything from Enron. There the employees didn't have a choice, all of their 401K money went to the Enron stock. Sometimes, we should pay attention to the old proverbs, "Don't put all your eggs in one basket".

Many of those people who lost everything only saw an easy way to make a profit and see their money grow. We all want that, there's nothing basically wrong with that. But, you have to be realistic. No one "investment" will make you rich, you have to spread your money around, some very safe placements (think bank accounts), a few high risk or speculative investments. And never invest more than you can afford to lose. I can understand people's putting a small amount of their money in Madoff's fund, sometimes you have to take a chance. But, they should remember that a high yield is most times a result of a high risk.

There is no way I condone Bernie Madoff's actions. He was wrong, he was a crook. What he was offering was too good to be true. The people who gave him their life savings were just plain stupid. Everyone has a right to be stupid, but don't expect me to feel sorry for you.


ms/sss said...

I still feel sorry for anyone who has been badly (and deliberately )used by someone else. There is so much good in the world, but the devil himself is so painfully powerful.
My friend lost everything, too. She is a hardworking, caring, highly intellectual and gifted person. Now, she's old, and has been physically, mentally and emotionally wiped out by Madoff.
I hope and pray the Phoenix rises!

ga.farmwoman said...

It is a shame what happened to so many people through Bernie Madoff.

I also agree that you should know not to put all your eggs in 1 basket or to put your eggs in someone else's basket too!

If someone else has control over your money, you have no money.
My thoughts for today.

Have a great weekend.