Your savings didn't do so well this past decade.

In the 10-year time frame ending Sept 30, 2009, this chart shows how the U.S. stock indices (and your money in them) performed - not a pretty picture.  Your "certified" financial planner has probably told you that over a decade stocks increase 12% on average.  Now you know what kind of advise you have been getting.

By keeping the interest rate low, the Federal Reserve has created all sorts of problems for the U.S. economy.  Not the least of which is depriving hard working, hard saving American families of a safe investment vehicle, such as FDIC insured bank accounts, in which they could deposit their money and earn a decent interest in return.

Without real interest-bearing accounts, Americans deposited their savings and retirements in the U.S. stock market and have lost an entire decade. 

So a penny saved is a penny earned but not much more.  For many Americans this means that retirement is much further off then they thought.

Still Holding Stocks? Financial Advisers Now Say Selling Not Bad Idea

"But if you see your portfolio shrinking, there comes a point somewhere between comfortable retirement and needing to eat dog food where your circumstances tell you to stop the bleeding."

- Quoted in in SF Chronicle business column

After years and years of telling average investors to stay in the market, the financial advising community has now started to change its tune. It's a little late for that.

The Lost Decade - Where Did My Savings Go?

Unfortunately, we all tend to learn our lessons after the fact.

The one we are learning now is that "investing" into stocks is risky behavior. For many Americans, looking at their retirement account is like 1995 all over again - all those gains have evaporated.

I think we'd all be better off if we called "investing" by what it really is: buying financial products.

The word "investing" puts a twist on "buying" that takes all common sense out of our decisions. We start to think that when we "invest" we are doing something more grand, more guaranteed if you will, with less chances of failure.

If someone said to you: "Jane, would you like to buy a mattress" you would ask a lot of questions. How does the mattress compare to others on the market? Is there a guarantee against defects? Who makes the mattress? Now think about how many questions you ask when a "financial adviser" says you should "invest" in a stock.

Now if you would just substitute "financial advisor" to "salesman" and "invest" to "buy" think about how that changes the dynamic. You'll ask a lot more questions and keep more of your money.

Everyday more of us are realizing that the stock market is not a strategy for retirement at all, it is a Ponzi scheme which leaves hardworking savers holding the bag.

How did we become so enamored by the stock market? We'll cover that next time.