From, Investors May Have to Surrender Gains ($), in yesterday’s Wall Street Journal:
Investors are unlikely to get back much of the money they invested with Bernard Madoff, and those who took out money in recent years may have to give it back.
Imagine that! You invest with Madoff for a few years and then decide to get out because something doesn’t seem right. So you cash out with a gain. A couple years later you find out he was a fraud and you say to yourself, “WHEW! I’m glad I got out when I did!” Then you find out that you might have to give it all back. Wow!
What if you already spent it? What then? Although the article doesn’t really say, I would think that those people would have to come up with the money some way.
Yet another reason for indexing! (I think I’m gonna write a book!)
Folks, this is why it is SO IMPORTANT NOT TO PUT ALL YOUR EGGS IN ONE BASKET no matter how SAFE the investment seems!