Was Madoff the only Ponzi Guy?

Many people have lost money in their retirement funds because they invested in a buy and hold strategy through managed funds. Madoff’s investment strategy was really a massive Ponzi scheme.

The Wall Street Journal’s Madoff List of Victims makes interesting reading when you realize many investors were supposed to know what they were doing. See the list.

But I don’t know if you could say the great managed fund buy and hold investment strategy was really any different. They are just as mysterious but trade between themselves to manufacture paper profits rather than keep it all in-house and use new investor money to manufacture paper profits.

It is sad that some people have lost their entire savings that were entrusted to Madoff. But is it any worse than people investing in “legitimate” investments having lost 50% of their savings through no fault of their own?

Having an inquiry into Bernard L. Madoff for a mere $50 billion makes no sense. What we need is an inquiry into the whole investment industry to find out why it’s only investment strategy is to trade the markets up until they crash and then start doing the same thing all over again.

All the while they make sure they pay themselves their fees and charges and tell you to hold on and don’t panic as the markets will return.

Of course the markets will return if they take more of your money and throw it at stocks. Eventually some of that money will stick and the markets will run up again.

This time it is a lot harder because the markets have fallen much farther. Eventually though, you can be sure the markets will turn bullish again, propped up by the new money you give them to “invest” on your behalf.

We all have short memories so I expect nothing will change and history will repeat itself in another 5-7 years.

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