Transcripts

"Riding Out The Financial Storm"-Scams & Corruption

SUSIE GHARIB: And finally, as we wrap up the year, we continue to hear from you on how you're riding out the financial storm. One recurring topic: corruption. Many of you are keeping a close eye on your investments in light of recent scandals. Tim from Pittsburgh blames corruption for his lack of faith in the financial system. He says the Federal Reserve, Wall Street, the Treasury, the Securities and Exchange Commission, his broker, the banking system, and ratings agencies are all corrupt. Tim says the only agency doing anything about the situation is the FBI. We asked Chuck Jaffe, senior columnist at MarketWatch, for his thoughts on corruption and how best to avoid it when it comes to investing.

CHUCK JAFFE, SENIOR COLUMNIST, MARKETWATCH: Well, I think you've eliminated almost everything you can invest in. Distrust of the Treasury means no Treasury bills. Distrust of the banking system means nothing with FDIC insurance, and you hate your broker and Wall Street. The one thing you might do, consider those companies that you believe have a great business, that sell shares direct to the public. That way you can invest maybe for the next 10, 15, 20 years and avoid the Wall Street machine by just investing direct with those businesses. If you're not that paranoid, or if you think, OK, I'm going to have to deal with this system a little bit, take the things that give you the most safety, so start with those stocks you love a lot and then add to that, bank deposits and Treasuries as necessary to get to where you can sleep at night and still deal with a system that you may not like and may think is corrupt, but its still the best system out there.

GHARIB: To share your thoughts and ideas or to comment on what others are doing, please visit the "Riding out the Storm" section of our Web site.