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The 10th Anniversary of Madoff: What Have Investors Learned?

Today marks the 10th anniversary of Bernie Madoff’s arrest on securities fraud. While the economy and markets have recovered from the Great Recession, investors seem to have short memories. The equity markets have experienced an unusually long period of relative tranquility, which makes it fertile ground for get rich easy schemes.     

One might think the publicity surrounding the greatest Ponzi scheme on record would make investors more suspicious to claims of exorbitant returns, but a recent article in Investment News found that in 2017 alone there were 675 enforcement actions against unregistered securities operators, many of them Ponzi schemes. 

Investors should also remember two unwavering truths: (1) risk and return are related and (2) if it sounds too good to be true, it probably is.