I read an interesting blog the other day that included a post comparing a hypothetical investment with Madoff to an investment in large cap US stocks.
The post was making the point that you could have invested up to $500,000 with Madoff 10 years ago, lost all of your money, received a settlement from SIPC for $500,000 and been better off than if you had invested in US large cap stocks -- and would have endured less stress along the way.
I couldn't quite get the moral of the story, or maybe I fundamentally disagree with making rearview mirror assumptions. Maybe if I try to find the next Ponzi scheme, then I will do better than buying US stocks? Well, because the large cap US stocks performed poorly for the last 10 years, doesn't mean that investors did not earn a reasonable rate of return on their investments (think international equities, bonds).
I think I will continue to invest in a diversified mix of equities (US, international, etc.) and bonds (municipals, TIPS, etc.) and forgo the search of the next big Ponzi scheme -- for a host of reasons.