The Corner

Economy & Business

Hey, Stupid

The Wall Street Journal has to publish a story like this one every couple of years.

When William Mark decided to get back into investing after the 2008 financial crisis, he looked past stocks and bonds. Needing to play catch-up with his retirement portfolio, the piping engineer decided to bet on a complicated product he hoped would deliver double-digit annual returns.

It worked so well—earning him 18% a year in dividends, on average—that he eventually poured $800,000 into the investments, called leveraged exchange-traded notes, or ETNs. When the coronavirus pandemic hit, he lost almost every penny.

“I’m 67 years old and I’m basically bankrupt in just two weeks,” Mr. Mark said.

The Journal should have a standing headline for these: “Hey, Stupid, Don’t Put Money You Can’t Afford To Lose into Complex, Volatile Investments You Don’t Understand.” If your broker or your brother-in-law promises you 20 percent on yen-denominated Baltic Exchange freight future — can’t lose! — run, run, run.

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