This morning I see that the Dow has lost 400 points by 10 am due to an "overseas selloff". We do not know how the day will end or whether the market will rebound Monday, but, one thing we know for sure is that our economy is in serious trouble. What a mess we are in. Has there been a period in your lifetime when the market has dropped so much and so fast? How many times have you heard that we have not seen anything like this since the great depression?
Most people I meet do not see how the losses in their accounts could possibly be blamed on their broker. After all, isn't the market tanking because of wall street greed, risky home loans, and recession?
Yes, it is true that the problems in the general economy were not caused by your favorite broker. But, your broker's job is to make certain that the transactions in your accounts are suitable in light of your financial situation and needs. Did he/she do their job?
In January 2008, I spoke before a business group and described the basic duties imposed on brokers under the NASD (now FINRA) rules. I recently reviewed my notes and was surprised to see that in January, I began my presentation as follows:
We are living in a time of economic uncertainty. For the first time in years
experts are discussing whether this is a recession. It is obvious
everyone needs to be concerned about their investment portfolios. The gains
we have been seeing in the market since the "tech wreck" may soon be
coming to an end.
When I made this statement, I was not making a bold predicting about the future performance of the market. I was merely repeating what was in the newspaper and restating the common knowledge at the time. We all realized there were clouds on the horizon at least 10 months ago.
What did your broker do with this information? Most are paid by you to manage your accounts, especially those who charge a percentage of the value of your portfolio on a monthly basis. If they are not watching your account, what are they doing to earn these fees? So, if your broker is at least pretending to earn his/her fee, did they call you to discuss diversification, liquidation, or changing your investments to something that will not be heavily influenced by dramatic drops in the S & P?
If you go to the doctor for almost any reason, they always take your blood pressure first. If they find that your blood pressure is high, do they act on that information? Of course they do. They recommend medication, exercise and/or diet changes. When your broker checks the pulse of the economy, they should also recommend action when they see something wrong. You should not expect anything less from your investment professional.
If you want to learn more about this, visit my website at www.tuckerludin.com/securitiesclaims.html
About Me
- Eric E. Ludin
- Clearwater and Tampa, Florida, United States
- Eric E. Ludin received his Bachelor of Arts degree from Michigan State University in 1979, with honors. He received his JD from the University of Pittsburgh School of Law in 1982. Mr. Ludin's practice concentrates on immigration law, securities litigation, general and commercial litigation, commercial landlord/tenant conflicts and personal injury litigation. Mr. Ludin was President of the St. Petersburg Bar Association from 2000 - 2001. He served as President of the St. Petersburg Bar Foundation from 2004 - 2006. Mr. Ludin recently completed a term as the chair of the 6th Judicial Circuit Grievance Committee “E” of the Florida Bar. Mr. Ludin is chairman of Menorah Manor, a not for profit nursing, assisted living and rehabilitation center. He is President of the Tampa Bay Leadership Counsel of the Crohn's and Colitis Foundation and President of the CASA Foundation (Community Action Stops Abuse). He is a member of AILA, the American Immigration Lawyers Association and is committed to assisting people realize their dream of living in the United States. Mr. Ludin has an "AV" rating with Martindale-Hubbell which is the highest peer rating an attorney can be awarded.