http://www.nytimes.com/2013/02/11/business/wave-of-investor-fraud-extends-to-ordinary-retirement-savers.html
My guess would be that almost no one on these pages will be affected by the risky investments detailed in this NYT article, but think it could be a reminder that shortcuts to high yields are leading more investors to take chances.
One of the more interesting comments was this, where the promised rate of return appeared to be more in line with low risk instruments.
A second concern is the rate of increase in the number of riskier products, many of which are finding their way into baskets of funds...
My guess would be that almost no one on these pages will be affected by the risky investments detailed in this NYT article, but think it could be a reminder that shortcuts to high yields are leading more investors to take chances.
One of the more interesting comments was this, where the promised rate of return appeared to be more in line with low risk instruments.
Mary Beck, a furniture business consultant in Pasadena, Calif., said that in 2008, as the stock investments in her husband’s I.R.A. began to fall quickly, the couple moved $470,000 to a new product recommended by their broker.
While the offering was unfamiliar — part ownership in a fleet of luxury cars — Ms. Beck bought the pitch because her broker had been around for years, and the product offered what seemed to be a modest annual interest rate of 7 percent.
“We knew that 12 percent wasn’t realistic, but 7 percent seemed realistic,” Ms. Beck said. “To us, it was a very conservative way to ensure that we’d increase our savings.”
Soon after they stopped receiving interest payments, the Becks lost their money when the venture went bankrupt in 2012. Ms. Beck and her husband have been reconfiguring their retirement and are planning to work longer.
A second concern is the rate of increase in the number of riskier products, many of which are finding their way into baskets of funds...
The money that retail investors have in alternative investments in the United States, ranging from baskets of commodities to mutual funds that employ sophisticated trading, more than doubled from 2008 to 2012, to $712 billion from $312 billion, according to McKinsey & Company. Many of the products hold out the promise of higher returns while ostensibly being immune to the volatility of stock markets.