Wall Street Is Not Your Enemy

The pain I have recently felt from the cracking of my nest egg is moderated only slightly by my amusement over how many people have suddenly turned into experts on the world of finance.

I may not be an expert either, but I am fairly certain about the following two things. One, people sure do seem to hate "Wall Street" and, two, there has been no better way to build wealth over the last 100 years than by investing in "Wall Street." I am less disheartened by the recent returns on my stocks than I am by the chorus of attacks launched against the "bailout," not because it's a poorly devised plan but simply because people are outraged by the idea of helping the investment markets.

Yes, regulation is needed and crooks must be rooted out. But please everyone, can we get over our irrational fear of the stock market? I know this crisis has been described as our economic 9/11 but must people behave just as hysterically? I expect everyone associated with Wall Street to be hauled off to Guantanamo Bay any day now. Sadly, the comparison ends there. There has been more hand wringing in Congress and the press over committing money to help the economy then there was to commit money and American lives to a foolish war.

So, when you're done bashing the concept of bailing out the "fat cats," take a few seconds to absorb the following. Yes, many wealthy people invest and work on Wall Street, but, not everyone who invests in the stock market is rich.

Many Americans are small investors who are trying to eke out a nest egg for themselves and their children and untold numbers of retirees live off their dividends and pensions. In addition, according to The Bureau Of Labor Statistics, 86% of all government employees and half of all private industry workers participate in a retirement plan. That means that a lot more Americans are dependent on the health of "Wall Street" than "Main Street" seems to know. And that's just the direct impact from falling stock prices. I am not even counting how secondary fallout from Wall Street failures (like, say, job losses) would impact people's financial security.

The problem is that too many people do not take an active interest in their investments so they don't think of themselves as investors. Sadly, fear generated by times like these and a lack of understanding about the market only increases the divide between the haves and have nots. You may win the lottery. Or you may grow up to be Alec Baldwin. But the odds are, if you are ever going to become rich, you have a much better opportunity to do it through wise investing begun at an early age.

We need to educate our children early about how to manage investments. As soon as they can learn basic math, they should begin to learn about business. I'm talking Elementary School education, folks. I can think of very little that will better prepare them to survive in our capitalist nation than that.

To be sure, there are corrupt or foolish practices on Wall Street that need to be stopped. A large, well informed and investment active populace can only help the oversight. Heck, it's clear now that 535 members of Congress barely understand how the market works. We can't count on them, so, as usual, we need to take care of ourselves.

"Wall Street" is not the enemy. It's a marketplace. Individual companies and individual CEOs are to blame as well as greedy Americans who bought more home than they could afford. To blame the market itself is like blaming the candy store because your son ate too much candy and got a stomach ache.

Comments

[elsasdodo]

The real question is why is your nest egg still in stocks at this point? We're dealing with a financial event of a magnitude seen maybe once or twice in recorded history. All talk about diversification and holding for the long term is nonsense in the face of such an event -- there is essentially no data and no precedent. Once your IRA/401k/whatever is out of stocks and in something safer (like cash), you'll have a much clearer perspective on the situation since you're not invested, so to speak. Then you'll better see Wall street for what it is.

[Bruce Tenenbaum - Huffpost Blogger]

History shows that investing in stocks, over the long haul, is the best way to grow wealth. We may indeed be experiencing just the sort of event you refer to, but it's a safe bet that down the road the market will rebound. When? Who knows. But if your time horizon is long enough, today may be a good time to start building for a very solid tomorrow. Of course, I could be wrong and the stock market may never come back. In that case, we'll have a lot more to worry about than just the returns on our stocks. FYI, I don't recommend that anyone put their entire nest egg in stocks.

[hiprogloho]

Yeah right. Not all mobsters are bad guys. Not all sharks are maneaters. And not all Wall Steeet CEOs watched the housing bubble burst while they expect bonuses out of the bail out. How about indictments?

[gramos]

Bruce,

Your piece is heartwarming at best, but the fact is Wall street is not wall street without fat cats and with regulation, so yeah i hate wall street for all that represents. I know friends of mine that invest on the market an are not rich, and i just fund out that many of them lost most of it or thousands of dollars, yet those who committed the crime walk away with millions of dollars, yes i hate wall street. Even though i care about the many workers on wall street and their families, they are all gamblers of the economy, they took the risk and crapped out and with their risk they messed up big, yes i hate wall street and i will probably will for as long as i can.

[mommadona]

Guns don't kill people.
People kill people (?)

People ARE Wall Street.
He who runs the machine does the deed.

That's why I hate Wall Street.

[Blk independant]

Yea see I totally agree. Wall Street is not the enemy. People need to know if we let Wall Street fail then so will those retirement nest eggs. I mean there is nothing wrong with capitalism just as long as the rules that are put in place are enacted. If the regulators were doing there jobs then maybe this would have never happen or it may not have been as bad. Anyway people need to wake up. The home that you live in, if it has a mortgage, then chances are an foreign investor(i.e. China,Saudi Arabia, Japan, G.Britian) has some type of stake in it. We are in a world market. just because it is an America name does not mean it is America owned. We as a nation have to try to save face in this extraordinary times. If not then these banks will not get the capital to lend money. Money for little Johnny to attend school, for Mega to buy and car, or for Marcia and Larry to buy an home. We are an credit society, which means buy now pay later. If something is not done then we will have to lower our standard of living, if this is ok with you, then continue be rail against the bailout. Those who see the bigger picture then stand and demand action from your politicians.