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Economy
In reply to the discussion: STOCK MARKET WATCH -- Monday, 17 March 2014 [View all]Demeter
(85,373 posts)6. The Wall Street product that could corrupt your investing soul
http://www.theguardian.com/money/us-money-blog/2014/mar/09/unbearable-lightness-options-wall-street-retail-investor?CMP=ema_565
Wall Street wants you to buy options, which are like derivatives with training wheels and dangerous when mishandled...Lets be frank: theres no such thing as an investment product that is absolutely safe. Not, that is, if you want to actually make money on your investment...There are products that add too much risk to our portfolios, even though theyre being offered to regular investors with no special expertise.
The same way the military refers to those outside its ranks as civilians and priests call anyone outside the religious order the laity, Wall Street also has its name for the kids not in its club: retail. If youre not a financial institution, and you have less than $1m in investable assets, youre a retail investor.
And if youre a retail investor, there are some products you should never even think about.
A big one is the category of products that can be lumped together under the label of derivatives, aka what Warren Buffett called weapons of mass financial destruction. How you can identify them: most of them are unpronounceable. They range from straightforward options on the S&P 500 index to highly complex structured notes, such as to pick one example at random the constant proportion debt obligation or CPDO.
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Wall Street wants you to buy options, which are like derivatives with training wheels and dangerous when mishandled...Lets be frank: theres no such thing as an investment product that is absolutely safe. Not, that is, if you want to actually make money on your investment...There are products that add too much risk to our portfolios, even though theyre being offered to regular investors with no special expertise.
The same way the military refers to those outside its ranks as civilians and priests call anyone outside the religious order the laity, Wall Street also has its name for the kids not in its club: retail. If youre not a financial institution, and you have less than $1m in investable assets, youre a retail investor.
And if youre a retail investor, there are some products you should never even think about.
A big one is the category of products that can be lumped together under the label of derivatives, aka what Warren Buffett called weapons of mass financial destruction. How you can identify them: most of them are unpronounceable. They range from straightforward options on the S&P 500 index to highly complex structured notes, such as to pick one example at random the constant proportion debt obligation or CPDO.
MORE
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Interesting roadmap on how to kill off a country. Bascially, take the companies that
jtuck004
Mar 2014
#10
Consortium News article (top) repost at theecologist via gmwatch link.
proverbialwisdom
Mar 2014
#33