Читать книгу More Straight Talk on Investing - John J. Brennan - Страница 27

It all starts with trust. To succeed as an investor, you first must trust yourself to make sound decisions. Second, you must trust the world's economies and the financial markets to be your allies in building wealth over the long term. Third, you must trust in time and the power of compounding—the way that “money makes money.” Finally, you must trust in the firms and financial professionals who serve as your partners in your investing journey.

When I was nearly finished with the first edition of this book in the summer of 2002, the broad issue of investor trust and confidence was a staple topic of newspapers and newscasts. Not only had the stock markets taken a proverbial drubbing during the previous few years, startling revelations about misdeeds at companies, including Enron, Tyco, WorldCom, Xerox, and Qwest, resulted in huge investor losses and shook the capitalist system to its core. All, or nearly all, of the value of these once-admired companies was wiped away when the market learned that management had misled investors through deceptive or fraudulent financial statements.

While employees, investors, and the general public were injured in the devastation caused by these high-profile breaches of trust, there was a silver lining to these stories: They showed that the system worked. Corporate executives who manipulated their financial statements and violated investor trust were eventually caught and brought to justice. Moreover, these abuses led to improvements in corporate governance and regulatory changes from which today's investors benefit immensely.

You're likely to witness untrustworthy behavior by firms and individuals in your investing lifetime. Some of the high-profile cases in the past 15 years include the Madoff Ponzi scheme (2008), the Theranos fraud (2015), and the Wells Fargo scandal (2016). Because humans are involved and greed is an eternal human failing, the system probably will always be subject to scandals and schemes, but I am confident it remains fundamentally sound. The reality is that most companies and most company leaders behave ethically and with integrity. The reality is that the markets ultimately reward honesty and punish untrustworthy behavior. And the reality is that you are left with little choice.

I would be remiss if I didn't mention that the mutual fund industry had its own bout of scandal. In 2003, it came to light that some two dozen mutual funds were illegally allowing trades after market close or permitting trades to favored investors that exceeded the limits stipulated in the fund's prospectus. There were subsequently trials, enforcement actions, hefty fines that gave the industry—and deservedly so—a black eye. In my view, the industry was humbled and, importantly, the Securities & Exchange Commission took actions to beef up fund policies and controls, as well as regulatory reviews to ensure compliance to them.

The act of investing is fundamentally a matter of trust. So, let's now look at the role that trust should play in your approach to investing.