Why Bank of America Has Lost You Money Over the Last 15 Years

In the following video, Motley Fool financial analysts Matt Koppenheffer and David Hanson take a look at Bank of America (NYSE: BAC  ) over the course of the last 15 years and discuss why this bank lost money for investors who held it over that long-term period, even including dividends.

While Bank of America was not the worst-performing big bank over that time period, Matt highlights two big high-risk acquisitions the bank made, of Countrywide and Merrill Lynch, that brought the bank's performance down significantly over that period. 

Despite these skeletons in Bank of America's past, the stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.


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  • Report this Comment On March 20, 2013, at 9:41 AM, tlafargue wrote:

    The answer is relatively simple. When the Glass- Segall portion of the 1934 Bank Act was repealed by congress in 1999, it "reopened" the door for the commercial banks and investment banks to reunite. Allowing the banks open investments departments and recreating the same environment and opportunity for the type of activity that was a dominant cause of the Great Depression. Only this time, the banks are insured by the FDIC.

    Consideration: Since the repeal of Glass-Segall in late 1999, it only took 6 years before the economy was once again destroyed. This is directly related to the fact that with this "new" power, the banks saw opportunity to make extraordinary profit through risky investments and moved from their primary economic function of providing capital to business and industry for economic expansion of which yield a lower rate of return.

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