The Market Is Scandalous And We Have To Deal With It

Includes: DIA, QQQ, SPY
by: Roger Nusbaum

This morning I have an article up at TheStreet about the LIBOR scandal as part of a package about the scandals of 2013 that I hope you will check out.

I wrote that article on Tuesday for an early Wednesday deadline but it published today. This morning as I start my reading I see yesterday's news about the guilty verdict from the SAC scandal and another story that both Facebook (NASDAQ:FB), Morgan Stanley (NYSE:MS), Goldman Sach (NYSE:GS) and JPMorgan (NYSE:JPM) might be on the hook for not properly disclosing a revenue warning before the IPO.

One of the things I mentioned in the above linked article is the extent to which these things have always come up and always will. There is no refuting that this is unfair when the banks or brokerages (aka the sell side) get away with this stuff and logically you have to believe they get away with a lot more stuff than they get caught.

Ultimately investors need to come to grips with this ridiculous reality and get right with staying involved or make the decision that it is too rigged and cease involvement, The reason I frame it that way is that it is not realistic to expect the sell side to operate differently (please read the above linked article for why I draw that conclusion).

My hope would be that no one gives up on their investing because of this because this has how it has been since long before anyone reading this ever bought their first share of stock or mutual fund. So there is nothing new here and yet the market is up however many hundred percent in the last 30 years.

Despite the nature of these firms there is no reason that a portfolio of several ETFs, three or four dividend stocks and one or two high fliers can't have a successful outcome (where success is having enough when you need it) provided there is also an adequate savings rate.

To be clear, no one is condoning scandalous dealings but obviously the world has not figured out how to solve this problem either. Speaking personally, my job is to try to help people get to where they have what they need and then try to help them manage that effectively so that is what I do.

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