I came across an interesting article written by Alexandra Penney, who was an investor with Bernie Madoff. She has lost her life’s savings and is documenting her journey towards getting back to a “normal” life through the “Baglady’s Papers”. You might find this article interesting as she certainly doesn’t fit the mold of a typical investor. Penney was a successful writer and artist and now is in the process of selling some real estate to cover her living expenses. You do get a sense of betrayal and anger as you follow her journey from New York to Florida to sell her belongings. Also, she seems to have coined a new term called “Madoff-ed”.
Penney doesn’t disclose how much she lost from Madoff, but you can only imagine that it would be several million dollars as she wrote the best seller “How to make love to a man” and was an editor for Self magazine. She looked to Madoff since he was averaging about 10% a year in returns and she could comfortably work on her passion of artwork. What this reminds me of is the investment advice to not have all your investments in one fund. Whether it’s your 401k or your bank account. Make sure you are diversified and not have all your eggs in one basket. I’m still wondering where all the Madoff money went. It couldn’t have just disappeared, could it?
Have you reallocated your 401k recently?
{ 4 comments… read them below or add one }
I don’t have *that* much sympathy for her. I wrote about it on my blog as well. She was motivated by greed – getting something for nothing even when no one else was getting the same returns. Not to mention the all eggs in one basket scenario.
My husband and I have our investments spread out but they still aren’t as diversified as they probably should be.
@ Megs
It’s amazing how many of these Madoff investors seemed to have all eggs in one basket. Whether it was greed or the claim that he could beat the market averages consistently for decades. I’ve got to work on better diversification as well and remember to reallocate once or twice a year.
How can someone not have some compassion for this woman? She saved her money and yes she put all her eggs in one basket that was “her” mistake. But the real mistake was investing with this Madoff- how dare he take money from hundreds of people and then walk the streets of New York city living in a million dollar penthouse, and owning homes all over the world. I think something fishy is going on and I think it starts with the SEC and maybe the Government or Congress should investigate why this Commission the SEC never had any heads up on this…isn’t this what they are suppose to do? That was my understanding of their role.
@ JJ Mom’s Cash Blog
Yes, something doesn’t look or smell right on this one at all. Apparently the SEC had several tips over the years and nobody took the time to investigate Madoff. I guess since he was a founding member of the Nasdaq, he had no reason to be questioned for his actions. But the SEC requires all brokers and dealers to constantly be monitored for trading activities. Something big was missed here.