Large and small investors—like journalists—recognize that “timing” can be everything in the market. Small investors, however, are not encouraged by responsible fund managers to attempt to “time” the market—due to risks they cannot afford. The temptation to time the market remains a challenge for every market participant however, regardless of government’s level of need; or a corporate level of greed; or an individual’s compulsion, for a growing general operating budget.
But, when corporate-influenced market timing (of selling and buying of large quantities of stock on closely held news) coincides with the inability of small investors to truly participate in a real-time, “free” market, it’s the middle-and-young Americans that can be most easily trapped. The lack of a truly free market and a prevalence of tainted forces arising from the winds of corporate malfeasance and growing fiscal unreliability can’t help but inhibit a small investor’s ability to truly gain in the market. The trap may soon also consist of a personal retirement plan while the traditional Social Security fund gets quietly siphoned for special interests. Sadly, this may happen with the blessing of the youth that manage to reach the middle-class.
As Capital Eye reports: “...The Alliance for Worker Retirement Security is the leading business coalition backing Bush’s proposal that would allow workers to invest some of their Social Security payroll taxes in private investment accounts. The Alliance’s 35 members include representatives of industries that could profit enormously from such a plan, including the Securities Industry Association, Wall Street’s main trade group, and PaineWebber—now called UBS Financial Services and one of the biggest campaign contributors in the securities and investment industry… the National Federation of Independent Business… Hewlett-Packard… pharmaceutical giant Pfizer…” and so on.
How many small investors do you know that are privy to the institutionalized business interests of the Fortune 500, much less privy to the interests that prevail within that alliance of 35? Small investors will perennially be subject to whims of large, institutionalized interests. Is there enough congressional will power to protect the average American Joe and Joan?
Time is not on your side if you are forced to enter or leave the market on a low note, because you can, even after many years of an overall rising market, still lose it all. Just ask a Chilean or a British retiree that opted for the private fund choice offered to them decades ago, but who is now being forced into poverty-level circumstances, clamoring to return to their country’s traditional publicly-financed fund. The British and Chilean fiascos aren’t merely about fund managers lining up to perennially lobby government for fees that hijacked their proceeds to the tune of up to 30 percent of the principal. It was also about poor investment choices, or choices that appeared to be good ideas at the time, but have now deteriorated, in the hands of alleged “free” market forces that emerged in shrinking economies.
Try this: write “MY SOCIAL SECURITY CHOICE” (all capital letters) on a sheet of paper. Hold it up to a mirror and then turn it around. Watch what happens to the word “choice” (with apologies to Tom Robbins).
Remember that it will take a lot more than mirrors to turn our nation’s Social Security choice around, once it is error bound.
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