As a former, and rather infamous stockbroker, Lee Munson has an intimate knowledge of the financial industry. Now an author and founder of the advisory firm Portfolio LLC, Munson has turned the tables on his former industry by exposing some of the most egregious ways Wall Street is rigging the playing field at the expense of individual investors.
In the attached clip Munson describes 3 products and strategies decidedly not in your financial self-interest.
1. Wall Street invents products then creates demand
"Wall Street is constantly coming up with a new product or mantra to get you to buy," Munson explains. By way of example the author of Rigged Money: Beating Wall Street at It's Own Game cites the 1980's creation of separate classes of mutual funds such as "Value" and "Growth".
The differences in most of these funds are not what they hold but how they're packaged. Investing is and always has been all about finding growth at a reasonable value. There is no actual mandate as to what these funds can and can't hold. Mutual fund managers are in the business of generating returns (read: "growth"). That's how the managers keep their jobs and add value.Read More »from 3 Ways Wall Street Is “Rigging” the Game