Sunday, September 02, 2012

Some "naive" investors came out of 2008 just fine: but NYT says we should regulate what is marketed to the inexperienced


The New York Times ran an editorial Aug. 31, “Risky and getting riskier”,. about loose regulation of advertising of financial products to investors, who are often retired seniors in practice. The link is here

The NYT claims that lax rules will allow seniors to be flooded with ads about financial products (that would include the Internet, where spam control is pretty much in private hands already), and that the only rule controlling who receives them is the net worth of the recipient.

The editorial points out that an individual’s wealth and annual earnings are no indication of investment savvy,  because wealth could have been accumulated from previous work or even inherited. 

Indeed, I’ve kept my own portfolio “simple”, relying heavily on immediate payoff of balances and compound interest math, and on alertness to unsound schemes.  I actually came out of the 2008 mess in pretty good shape – I may actually be better off than I would have been had it not occurred, and that is not a good moral reflection. 

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