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Beware of 'Never' and False Security in Investments
Financial memories are extremely short, which leads new, often overconfident generations to overlook past disasters and embrace what they view as innovative financial practices. This cycle contributes to market bubbles, as seen with subprime mortgages, which were mistakenly labeled as safe despite their inherent risks. The misconception that certain investments offer high returns without additional risk, such as mortgage-backed securities during low equity and bond performance, draws investors into perilous situations. Engaging with investment strategies that promise superior returns without additional risk is a dangerous folly that should be avoided, especially by those lacking investment acumen.