It is both funny and sad, watching the shills for the Wall Street brokers and all those dependent on them for money, like the major papers.
This New Years article in the New York Times, relying almost completely on information from Vanguard and typical mutual fund promoters, is but one of the flood of propaganda pieces we see, not only in the print and on line editions of the main stream papers, but for those of us retiring or once planning to retire, boomers, in our mailboxes at home and the office.
I excerpted and set out the beginning and end of the featured Business item on the New Years New York Times web and you can read all the 20/20 hindsight about if you had been smart and followed the wonderful advice of "your broker" and Vanguard, you would have done well and will continue to do so, if you take that advice.
Of course there is nothing about all the incorrect advice and hype that was spewed out daily and hourly to investors over the last decade or about all the millions made in commissions, salaries, bonuses, etc., by the Wall Street empire builders despite the bad advice.
To me the real proof that people are starting to understand all this is the decline in the cars in front of the local small town broker's offices in our 50,000 population community, and the decline in the advertising, donations to charity and the like from these local brokers. They are even closing offices in some of the smaller communities.
In my small law practice as I do wills for folks, mainly age 50 + and especially those in their 70's and older, I hear over and over about how they lost huge, for them, sums, in their retirement accounts and their separate individual investment accounts. Most just laugh when I ask the name of their broker for their records and say they will not be using them any more. The older ones, especially, are looking at local banks credit unions and their CD's as safe and insured places for their money, even at the very low interest rates they offer. Most make it very clear that they will not, in their lifetimes, ever go back into the stock market.
So, if that is any indication of the mood of the investors who, like me, learned about investing when we started watching "Wall Street Week" on Public TV many decades ago and slowly built up trust in brokers despite what my parents told me about their parents brokers mishandling, embezzling or just riding it all down to nothing in the Depression, the decline in the general flow of money into mutual funds in the next few years will shock Wall Street.
So watch for more puff pieces like the following, from papers that depend on the advertising money from Mutual Funds and Wall Street and whose managers hang out at the same country clubs as the Mutual Fund managers and their Wall Street bosses.
As for me, I will invest in my children and hope they visit me and bring me some goodies at holiday time as I sit in the Veterans Retirement Home and tell stories about "The Good Old Days." That is, if the Vets programs are still being funded, a least minimally.
New York Times Vanguard Promo---
Was it a lost decade for your investments?
Your Money with Ron Lieber and Tanzina Vega
At least that’s what stock market commentators have been gravely telling us for at least a year. The 2000s, they argue, was a lost decade. And at first glance, they appear to have gotten it exactly right.
If you invested $100,000 on Jan. 1, 2000, in the Vanguard index fund that tracks the Standard & Poor’s 500, you would have ended up with $89,072 by mid-December of 2009. Adjust that for inflation by putting it in January 2000 dollars and you’re left with $69,114.
But that is not how most real people invest. They don’t pour everything they have into just one type of asset and then add nothing to it for 10 years. Instead, they buy stocks of all sorts, and bonds and perhaps other things, too. And many millions of them dutifully add more money regularly, usually into a retirement account that they won’t touch for longer than a decade.
For those people, it was not a lost decade at all. Even those who started with a low six-figure balance could have doubled their total savings in the last 10 years.
How? Consider a few decade-long scenarios that I asked Vanguard to run using its low-cost index mutual funds. September 1974, produced an average annual return of 6.53 percent.
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Many of us could live with that, but stocks may not do even that well for the next 45 years. Near the stock market’s nadir in 2009, Robert D. Arnott of Research Affiliates scared a number of readers half to death by noting in an article in The Journal of Indexes that from February 1969 to February 2009, investors in 20-year Treasury bonds outperformed the S.& P. 500.
Stocks have since pulled ahead again, but Mr. Arnott’s larger point still stands — that the reward you’re supposed to get for the added risk of investing in stocks can seem awfully elusive in some contexts.
No one knows which asset class will outperform the others over the next 10 (or 45) years. That’s why it’s important to invest in more than just stocks, and why a bad stretch for certain stocks may not matter as much as it first appears.
Few of us have the long-term investing prowess to pick the right moment for the right stocks. But persistence has its own rewards. Savers are never losers, even if some stocks have let us all down in the short term.
http://www.nytimes.com