In the late 1920s, the American economy looked unstoppable. Innovation was booming. Credit was easy. New investment products were being pushed to the masses. The stock market had become a national obsession.

And under the surface? A fragile system of interlocking structures, misaligned incentives, and almost no regulatory oversight.

Sound familiar?

Lately, I’ve been reflecting on what history teaches—and warns—when exuberance outpaces understanding. The parallels between the Roaring Twenties and today’s financial system are, at least to me, impossible to ignore.

For those who weren’t around for Summer 2023’s August and Everything After – Part I, [here’s the link]. That piece was not just about markets, but more about meaning. I reflected on August as a month of transition—both personal and historically for the markets (lots of bad Augusts!). I noted “In essence, "August and Everything After" symbolizes the beauty and complexity of the human experience, emphasizing the significance of moments, the inevitability of change, and the importance of embracing the journey that follows. It's a phrase that invites contemplation about the meaning and value of the events that shape our lives and the ongoing narrative that unfolds after significant points in time.”

Are we at a significant point in time? Every summer, for reasons I can’t fully explain, I find myself reaching for books about risk and financial history—especially when the world feels a little too comfortable. Maybe it keeps me grounded while others fly too close to the sun. Maybe it’s made me overly cautious during bull markets. Or maybe—just maybe—it’s helped us retain the kind of clients who care more about preserving wealth first, and growing it second.

Lately, my mind has returned to The Partnership—the story of Goldman Sachs in the 1920s. So while the world enjoys the final stretch of summer, I find myself watching the markets a little closer than usual—improving my resolution, scanning for signs others might miss.

Not that we ever stop watching closely. But sometimes a coarse setting is enough. These days, I’m reaching for a finer one. (A nod to my undergrad science days—microscopes and all. I’ve always loved the concept of resolution.)

What Do I See?

Deregulation + Innovation = Risk

Today’s marketplace is awash in financial innovation:

• Crypto products are being greenlit for retirement accounts. What?!
• Private equity and private credit are becoming more accessible to retail investors through “democratized” platforms.
• Funds are being built on top of funds, layered over innovation products—creating opaque structures that feel eerily similar to the trusts of the 1920s.
• New wrappers are being sold before they are fully understood or stress-tested.

Meanwhile, the regulatory tone has shifted. From Trump’s executive order promoting crypto and private equity in retirement accounts, to bipartisan enthusiasm for “increasing access,” the message is clear: growth first, guardrails later.

But we’ve been here before.

A Lesson from The Partnership (and 1929)

In Charles Ellis’ The Partnership, Goldman Sachs’ activity in the 1920s offers a sobering example. At the peak of the market boom, Goldman created the Goldman Sachs Trading Corporation—a fund that invested in other investment trusts, many of which invested in each other. The leverage and opacity became unsustainable.

When the market turned in 1929, it wasn’t just individual stocks that crashed—it was entire ecosystems of trust-based products no one truly understood, let alone properly valued. The unraveling exposed systemic risk built on optimistic assumptions and poor transparency.

The fallout? The Securities and Exchange Commission (SEC) was created in 1934—to bring order, disclosure, and accountability to financial markets.

Are We Repeating Ourselves?

I’m not saying we’re headed for another 1929. But I am saying this:

• Financial engineering is outpacing investor education.
• Risk is being layered and redistributed in ways that are hard to track.
• The lines between public, private, and alternative are blurring—but transparency is not improving.

We now have:

• Immediately liquid ETFs owning not-immediately-liquid investments
• Private equity in 401(k)s
• Crypto infiltrating the entire financial system
• AI-generated trading strategies backed by stablecoins. Huh?

I’m a CFA charterholder, an analyst, a Wharton grad, and even I’m getting a tad lost.

Yet at a pool party last weekend, I overheard non-investors chatting about IPOs, Robinhood, CryptoDentists—you name it. One even said, “I have no idea what any of this stuff is, but I buy it because it goes up.”

Each trend on its own might be exciting. But collectively? It starts to feel like a house built on speculative enthusiasm—not fundamentals.

So What Can We Do as Investors?

1. Ask hard questions. Who’s getting paid? Where’s the liquidity? What’s the actual risk model?
2. Don’t chase shiny objects. Innovation can be powerful—but dangerous when it lacks transparency or a track record.
3. Remember: regulation follows crisis. The SEC wasn’t created to prevent disaster. It was born out of one.
4. And many others I run through before investing. (note not before speculating, that’s not my m.o.)

Final Thought

Progress is essential. But so is prudence.

As we rush to embrace new frontiers in finance, we’d do well to remember the lessons of the past:
Just because you can package something into a product, doesn’t mean you should. Just because you can invent something, doesn’t mean you should or that it is good.
And just because the rules allow it, doesn’t mean it’s wise.

If you don’t understand it now, you’ll understand the real cost later—when clarity becomes necessary, and it’s too late.

Let’s build systems that are resilient, not just revolutionary.
And let’s use better microscopes—so we can keep sharpening our resolution, even as others zoom out.

Enjoy your summer.
Stay invested.
But know what you’re investing in.

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About the Author

Dane Czaplicki, CFA®

Dane Czaplicki is CEO of Members’ Wealth, a boutique wealth management firm that offers a comprehensive approach to serving individuals, families, business owners, and institutions. The firm’s goal is to preserve and grow its clients’ wealth to endure over time, while thoughtfully evolving its strategy to suit an ever-changing world. With over 20 years of wealth management experience, Dane and the Members' Wealth team thrive on bringing clarity and confidence to clients' unique situations. He believes everyone needs sound financial advice from someone whose interests are aligned with theirs, and is determined to put service before all else.

Dane received his MBA from The Wharton School of Business at the University of Pennsylvania and his bachelor’s degree from Bloomsburg University. Outside work, he enjoys spending time with his wife and kids, hiking and camping, reading, running, and playing with his dog. To learn more about Dane, connect with him on LinkedIn.

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