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Wealth Strategies: Markets too much for retail investors

Thursday, August 02, 2012 - 04:13

Aug. 2 - Securities lawyer Bill Singer says Knight's trading loss indicates market technology may be too far ahead of small investors and that regulators need to be on the ground to prevent future losses.

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There is no investor confidence in August of 2012. From the FaceBook IPO from the flash crash from the Great Recession investors don't trust Wall Street they have no confidence -- Wall Street. So perhaps that's a saving grace is that even a typical. Such as night crashing and burning yesterday. Isn't necessarily going to trash investor confidence because frankly there isn't an investor confidence. Is destroyed overnight. It takes years to build it. So the challenge for Wall Street right now it is years and years of good faith efforts to regain investor confidence. Certainly what we saw yesterday with Knight isn't building towards those years of confidence building measures. The market has in some sense outstripped the ability but competency of most mom and pop pastors. You know 4050 years ago. In the minority of Americans were invested in the stock market. Today from 51 k.'s pension mutual funds ETFs. Discount. Brokerage accounts online brokerage account my guesses majority of Americans were exposed to the stock market. But that's dangerous because a lot of times people think they know what it is doing. Which leads to -- off which leads to stand. Which in some sense leads to everybody investing in FaceBook because everybody knows the stock could only go up surprise. So I think to some extent. The retail investor. Needs professional advice the problem is they don't trust Wall Street professionals. And Wall Street made that it. Technology is a game changer. Where we used to have hours and minutes to contemplate problems now we have minutes and seconds. And we saw what the flash crash and a market couldn't go into the toilet within seconds. Technology better or worse is here. The thing is how do we control number one we have over blown bureaucracies regulating Wall Street the first thing I would do -- Is I would had a mines regulation. I would decentralize. Regulation I would take the SEC. And move it back into the field. I don't have any use for the SEC's office in Washington DC. Last I looked there's no stock exchange in DC. The problem that occurred with -- yesterday technically occurred in Jersey City technically occurred where this service -- didn't occur in Washington. Wall Street's regulation right now. Is effectively reading -- tags in the more. We're looking at what killed the market when we need to prevent those events. We want the 3000 men and women at the FCC engaged in anti fraud. And engaged in oversight of companies such as -- to protect the markets. We don't need them sitting at desk writing rules and regulations. Wanna get retail investors back you probably need to get rid of the commission system. You probably need to allow retail brokers. To participate in the profits up an account such as an investment advisory community. But more importantly I would love to see an anti fraud fund which United States government or some industry group would set up. Which would guarantee all investors and Wall Street that if you can prove you've been victimized by fraud. And the firm that you go after its bankrupt for the individual personal money. That this anti fraud fund. Full service -- safety net.

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Wealth Strategies: Markets too much for retail investors

Thursday, August 02, 2012 - 04:13