Since the frauds like Madoff and Nadel and the institutional failures like Lehman Brothers and Washington Mutual came to light; there has been a legitimate concern about the safety of assets.
Madoff and Nadel were true frauds—they never actually held the assets their investors thought they owned. What caused all those financial institutions like Washington Mutual to fail? It was bad loans. And, why did so many brokerage houses fail or have to be taken over? It was overleveraging. Lehman Brothers, for example, had thirty more times debt than they had capital and most of it was invested in mortgage loans. When the real estate market went sour, they were forced into bankruptcy.
Do you have concerns about the safety of your assets? If so, here are some considerations.Read More