Thursday, August 2, 2012

There is no safe investment, really.

Wednesday's technology breakdown roiled the prices of some 140 stocks listed on the New York Stock Exchange, undermining fragile investor confidence in the stability of U.S. stock markets.

$440 million dollars from Knight Capital group who does the trading for TD Ameritrade. This just goes to show you can make all the careful investing with all the big companies and still lose your ass off.
"This issue was related to Knight's installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market," Knight said. "This software has been removed from the company's systems."

This kind of story continually pops up and scares the hell out of me and investing money. Rogue trader, inflated this or that, insider information, ponzi scheme, software glitch... 

It's a shame since the only way to retire is to grow your retirement income in order to keep up with rising prices of everything. How is this even possible when the return on investment is so tiny. When it's time to cash out you get taxed on the gains and that can usually wipe out all of the forward progress you had made.

I can't think of a safe investment that will grow, even precious metals aren't exactly a safe bet. It's probably the safest thing, if you have the metals on hand, but the price (even back in the $800 an ounce days) is hard to swallow.


  1. Max, I kept up with this all day so far and yesterday.

    Just how often do you have software that suddenly does the EXACT opposite of what it was supposed to do.

    It went from "buy low and sell high" to "buy high and sell low"

    The whole mess smells badly to me of sabotage.

    1. I agree... almost as if the stuff they picked up for high made a lot of other people really rich.

      There is a benefit to being poor, I never have to worry about losing money this way.

  2. Fortunately, we have no extra money to "invest" in things other than basics. It seems that the options are keep working or be come as self sustaining as possible.

    1. It's sad that having no money to invest makes us fortunate to not have every cent stolen, mismanaged, taxed or lost.