Perhaps it is now long forgotten, but as recent as the last major stock market crash in 2008/2009, Phil Cannella saw some of the largest U.S. firms, true icons of the “strength” of the American economy, come to a complete collapse. He witnessed General Motors, who filed for bankruptcy and left all stockholders and bondholders empty handed.
Yet this firm and others like it received a nice bailout from the federal government, reappeared on the stock market under a new ticker, and landed huge profits and bonuses for its executives.
Phil Cannella points out that most investors seem to have forgotten about that with their bullish feelings back after the 2012, 2013 and 2014 rocket ride with the S&P and Dow hitting new highs almost every week. Yet the pretty picture changed in 2015 and volatility is back in force. Volkswagen was recently crowned the world’s biggest car manufacturer, taking over the position that Toyota has held for some time.
Yet the recent emissions scandal has not only betrayed the confidence of consumers buying their cars but it has hit their stock market price.
“Volkswagen AG lost almost a quarter of its market value after it admitted to cheating on U.S. air pollution tests for years, putting pressure on Chief Executive Officer Martin Winterkorn to repair the reputation of the world’s biggest carmaker.” http://www.bloomberg.com/news/articles/2015-09-21/volkswagen-drops-15-after-admitting-u-s-diesel-emissions-cheat
Volkswagen’s stock price has seen a dramatic sell-off, far greater than the industry average and is now almost 60% off its peak of just April this year.
Phil Cannella asks if this is the sort of place a retiree should be invested? Or should a retiree look to safer places where principal protection is the focus rather than potential gains? You cannot hang your hat and retire comfortably while investing in risk. You can however, if you have get educated on the exclusive Crash Proof Retirement System.