Blindfaith — Our Misplaced Trust in the Stock Market amd Smarter, Safer Ways to Invest The White Paper by Edward Winslow
Beyond Blind Faith–There Is Clarity
As a society, we have placed our faith, hope, trust, and dreams in the upward movement of future stock prices…over the long run an investment in stock–a percentage share of ownership in a corporation–is the best place to put our money. This is a myth that we individual investors have come to blindly believe. If unprotected against loss, an investment in stock or an equity mutual fund is nothing more than a gamble.
The Four Main Messages
The risk of placing money into common stock or equity mutual funds has evolved to the point where this process, commonly referred to as investing, can now be more accurately described as speculation or gambling.
The people who place money into the stock market take on most of the risk but receive only the “crumbs” of a market advance. The real winners are the executives, the corporations, and the brokerage industry. The rewards are so great that the behavior of these “beneficiaries” of market advances can range from unethical transgressions to outright fraud.
The traditional measures for dealing with market risk–asset allocation and diversification–do not adequately address the problem. There is a new philosophy and strategy for dealing with the inherent dangers of stock market investing.
There are ways to participate in market advances while protecting the underlying principal against loss. These “protected” investment alternatives are available today and are evaluated as a means for intelligently dealing with market uncertainty.