Sorry to disappoint all of you Wall Street haters out there, but the lesson of the movie Money Monster is not that Wall Street is ‘evil’. The lesson is that when you invest your money in something, whatever that may be, it is up to you to educate yourself about what you are investing in instead of simply following someone else’s advice, especially if that someone else is a talking head on TV.
If you are a seasoned investor with a well-diversified portfolio, then you are going to watch Money Monster for its entertainment value, Monday-morning quarterback the movie for a few minutes afterwards, and then move on with your life. There is nothing controversial or overly thought-provoking in the movie for you. CEO’s lying and taking advantage of loop holes, making secret deals with union leaders to avoid or prolong strikes to manipulate share prices – it’s all run-of-the-mill normal ‘evil’ capitalism to you. Markets and share prices go up and come down and based on when you buy, you’ve either made some great money by the time you sell, or you’ve taken a bath if you sell now, or worse yet, are forced to sell at market bottom for some reason, but have diversified and saved enough that you don’t have to sell at bottom, but can hold on and ride out the storm, or in the worst case scenario, completely lose that fraction of your portfolio, but have that loss cancelled out by holdings and gains in other areas. No big deal, right? Diversification, golden rule, etc., etc.
But, if you’re a novice investor or someone who is not actually invested in the market yet, you’re going to see Money Monster and it is going to reinforce all of the ‘evil’ Wall Street stereotypes that you have come to know and love over the years. The poor little guy who comes into a large sum of money and invests it without any real knowledge of money, the market, the company he is investing in, all because he is trying to do something a little smarter with the windfall than blow it on a new expensive car or ridiculously expensive home theater system. And to top it off, that poor little guy is taking the advice of an investor turned cable finance channel showman a la Jim Cramer on a single given day as he looks for that one great investment that is going to turn his $60,000 into a million bucks in no time flat. The novice and non-investors out there are going to walk out of Money Monster feeling even more conspired against and stolen from by the big banks and ‘evil’ capitalists than they already feel because of their self-perceived non-self-inflicted, down-trodden life state – still waiting for that one big break that will help them get rich, and get rich quick through a single investment.
The lesson of the movie Money Monster is this: Please, please, please, for the love of God, if you do not know anything or very little about money and you come into a chunk of it, either via inheritance, lottery, surprise duffle bag full of money mysteriously left on your door step, or some other means, DO NOT, I say again, DO NOT, invest that money without learning as much as you can about investing first! And for the sanity of all of us who are forced into the position of not feeling bad for you when you do so, DO NOT invest all of your money in a single position – a single stock, a single commodity, a single store, a single person, a single advisor, a single family member, a single family business, a single investment house, a single hedge fund, etc.
This lesson has been out there for all of us since the dawn of investing, folks. When you work at Enron, you don’t take all of your 401K money or all of your windfall from Great Aunt Shirley’s will and put it all in Enron stock. The single greatest advice on investing is NEVER, NEVER, NEVER, put all of your eggs in one basket. I know a lot of you out there that just said, “Well, duh,” to yourself and rolled your eyes, but if you watch any news interview with your average non-informed investor right after a market crash, or spend any time watching American Greed on CNBC, then you know the common theme in these post-crash or post-swindle stories is someone taking all of their money and investing it all in one place. “I took my life savings and gave it all to one guy and it was a scam and now I have nothing!” “I worked at Enron, I invested every penny at Enron, and now I have nothing!” These stories wouldn’t exist if people weren’t out there still doing this.
If you want to drive a car, we have laws in place that say you must be trained. Go try to rent a plane without a pilot’s license and see what happens. Yet, you can open a brokerage account online without any training what so ever. You can take your life savings, no matter how small or large that sum may be, and invest it in the most ridiculous way possible and there are no laws to stop you. I am not saying there should be, but capitalism, folks, she expects you to at least have some common sense and learn a little bit about something before you invest your life savings in it! And honestly, that’s not a lot to ask.
So, go see Money Monster and either enjoy it, hate it, find the main character either a hero, anti-hero or cliché uninformed investor, but please never lose sight of the fact that while the lesson of the movie may be diversify, diversify, diversify on the surface, the real message is, PLEASE, for the love of all in this world, DON’T INVEST YOUR MONEY IN THE MARKET IF YOU DON’T KNOW WHAT YOU ARE DOING! Leave that money sitting in an FDIC insured savings account until after you take the time to learn more about investing and the market!
Photo via Pixabay
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