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Triple A
You put a big chunk of your nest egg in a life insurance policy with an A+ company. You invest another sizable amount in a portfolio of high-rated corporate bonds and tax-free municipal bonds. Then, feeling safe and secure with most of your funds, you take a flyer on a few stocks that a half-dozen separate research analysts have unanimously rated as a "buy" or at least a "hold."
You assume you've made informed decisions based on the best research the world has to offer. The reality: Even in the absence of bubbles or busts, you could suffer wipeout losses.
Hard to believe this could actually happen? Actually, it already has happened. It is a paramount goal to make absolutely certain you don't get caught in
Wall Street deceptions like these in the future. So in this article, I tell you what they are, how they emerged, and how to avoid them.
Their primary cause: Legalized payola and massive conflicts of interest.
The primary result: Distorted research and inflated ratings on hundreds of thousands of companies, bonds, stocks, and investments of all kinds.
The threat to you: Far fewer profits (or bigger losses) in your investments than you would have anticipated otherwise.
Indeed, Wall Street's
inflated ratings are, themselves, a kind of bubble, which, when fully exposed, could suffer a great bust of its own — deepening the price decline, hurting the chances of each company's survival, and aggravating any economic crisis.
Wall Street's ratings are the brains and nervous system of the global financial markets, and those markets, in turn, are the heartbeat of the global economy. So when the integrity of the ratings is severely compromised, it places everyone in danger, whether an investor or not, whether rich or poor.
Comment: It's Nazi Germany all over again. Check out:Psycho Nazis Unite: Right Sector mobilizes in Ukraine, pulls units from east