Free Rise

Also from yesterday’s FT-sponsored Financial Services Marketing breakfast, Richard Waters dropped these Six nuggets of received wisdom that have been discredited by the financial meltdown.

• Stocks go up 10% a year. So what if you’re going to retire in a few years? Why miss out on more gains by preserving your savings in boring CDs and bonds?
• You can beat the market. Just ignore what Bogle and his adherents have been proving for years. Cramer will get you your returns.
• House prices only go one way. Waters told a story about a fight he and his wife had after a real estate agent in Marin tried to convince them of the truth of this. Fortunately for the Waters’, he won that fight. Millions of others were not so smart (like Suzanne’s hapless clients. What? What?).
• Financial innovation is good for you. Forget about how Orange County went broke investing in these newfangled “derivatives.” Go ahead and bet the whole financial system on incomprehensible instruments. It’s science, people!
• Big banks can’t go bust. They’re way too diversified, right?
• You can’t go wrong giving your life savings to a middle-aged white guy. Especially if he’s named Madoff or Stanford. Interestingly enough, this seems to describe the staff of the FT.

This entry was posted on Thursday, April 23rd, 2009 at 10:08 am and is filed under The Biz, The Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.