Net Worth Update: May 2010 – The Sky Fell

by Mark Wong on June 4, 2010 · 0 comments

in Net Worth

Net Change: $ (1,324.54)

Net Cashflow: +$1,966.45

Investment Performance: $ (3,290.99)
May 2010 S&P Performance: (8.2%)

Food Spend Monthly Change: +$134.85
Dining Out: $ (248.65)
Groceries: $ (225.43)

Why do I even trust the stock market anymore?  This month was very good for me from a cash flow perspective, showing a net of nearly $2,000.  Additionally, my Dining Out and Groceries expenses were down by more than $100.  Despite this silver lining, my overall net worth went down.  Why?  Because my market exposure, which honestly is still a small part of my portfolio, killed my net worth in May.  My investments went down by more than three grand, negating all the positives of the month.

Believe it or not, it’s not the recent performance of the stock market that has me upset;  I know the market will have ups and downs.  The problem I have is fact that the market is no longer efficient.  It’s become a giant Ponzi scheme designed to ensure the viability of investment banker bonus plans.

There’s no better example than the useless reform Congress is trying to pass right now.  They could easily prevent the financial meltdown we went through, from ever happening again, by simply re-instating the Glass-Steagall Act.  But they won’t.  The banks own the politicians.  Wall Street lobbyists spend billions of dollars on buying out Congressmen every year.  They’ve essentially guaranteed that a decent financial reform bill will never pass.

Yes, some kind of toothless financial reform will pass by this summer.  But the banks will still be too big to fail.  The derivative markets will still be opaque.  And ten years from now, we’ll all be sitting on the wrong side of a market crash, wondering why we didn’t just invest in cash and CDs all along.  To be honest, I’d rather lose money to inflation than get ripped off by Wall Street again.

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