Making Sense Of The Financial Fiasco

In my last post, I mentioned I sort of tracked markets around to get a feel of what’s happening. Off course, I did a fair share of reading to make sense of the financial fiasco.

I say fiasco because as usual, a relatively small group of people in financial and investment circles managed to turn the world’s financial system topsy turvy.

In case you want to understand more what happened, I suggest you take a look at this article on Time magazine. I spent a good amount of time to read and re-read the article to understand. I

In case you don’t understand the article, that’s okay because most people don’t as well.

Warren Buffett, the nation’s most successful investor, back in 2003 called these derivatives — which it turned out almost no one understood — “weapons of financial mass destruction.

Having taken a financial planning level class on investment, I do understand a bit about derivatives, but the level these people do it coming out with all sorts of fancy pants names is altogether a different level. Check this out

Would you know how to rate a collateralized loan obligation? Or commercial-mortgage-backed securities?

I know of people who invested in financial instruments they know nothing about and bought it just because the returns are good. Don’t make the same mistake. Stick to what you know. Something safe and boring is better than losing your retirement money. You can read the full article here.

Related Articles:

Knowing Financial Terms
Financial Terms Part 2
Understanding Financial Terms
Do Experts Really Know