Phew! We made it back, finally. I’m talking about the DJIA, of course. After years and years of giving us absolutely no comfort at all, the DJIA is back in record territory (assuming no great market collapse between now and press time).
Remember the good old days when the DJIA was hitting new records seemingly every day? Of course you do. The money was flowing and every move you made for your clients was golden. Life was good. And then, suddenly, it wasn’t.
All those years of smooth sailing got wiped out by one big hurricane. For investors near retirement it was an especially terrifying blow. This financial storm blew major damage to nearly all of us.
The industry veterans had seen markets go up and down. They’ve all had plenty of clients lose money before. They told themselves, “We’ve been through this before, and we can get through it again. Stay the course.” The old-timers preached patience to all the young whippersnappers.
And then, the bottom fell out.
Investors started to learn that the very industry they had trusted with their life savings was the very industry whose own greed and stupidity was about to bring us all to our knees.
Portfolios were cut in half. Bonuses were lost. Long-time mainstream financial institutions vanished. Thousands and thousands of jobs and promising careers got flushed down the toilet. And it was the financial industry’s entire fault. Ouch.
I knew this crisis was serious when one broker-dealer was forced to cancel its previously scheduled broker “awards trip” to Las Vegas. As word of this trip became public, newly poor investors began gathering rope and looking for tall trees. The firm’s decision to scrap the outing was wise.
That started an avalanche of trip cancellations. There wasn’t a financial advisor in the world who wanted to get caught doing the chicken dance in Maui while his clients were home applying for food stamps. It’s one thing to recommend an investment that loses money. It’s another thing to create the investment, sell it and then mismanage it.