The Damage To Wall Street's Investors

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This has been a rough year for investors in Wall Street firms, many of whom work at the firms themselves. The Amex Broker-Dealer Index is down for the year, as are the shares of nearly every Wall Street investment bank and brokerage. With the exception of Citigroup, most started the year out with gains in their share prices. But when the broader markets plunged in February, the stocks of the banks and brokerages saw much steeper losses and few every recovered. Although there have been up weeks and down weeks, for long term investors, investing in these companies has been a losing strategy this year.
Morgan Stanley, JP Morgan Chase and Goldman Sachs all recovered into positive territory, while Merrill Lynch, Lehman Brothers and Bear Stearns struggled and, except for brief pops for Citi and Lehman, shareholders found themselves losing money all year. News of the credit crunch and subprime mortgaged related losses in late July and August, bringing the stocks in the group down even further. None of the Wall Street firms have traded higher than they did at the start of the year since July.
The sole exception to this has been the recovery of Goldman Sachs, which rose after its third-quarter earnings report revealed it had made massive gains in the areas where so many of its competitors have stumbled. It's stock is up close to 12% year-to-date. The next be performer, with a share price decline of less than 5% for the year, is JP Morgan Chase. All of the others have declined by more than 20%. At the bottom of the barrel are Merrill and Bear, which are quickly closing in on declines as high as 30% for the year.

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