Monday, February 11, 2013

Investors beware: If it's too good to be true ...

Posted By on Mon, Feb 11, 2013 at 6:45 AM

The New York Times has a good cautionary story today. It's about how people looking at low interest rates of conventional investments have been drawn to risky propositions to improve their retirement outlook. Dangerous business.

An Arkansas regulatory is quoted. Unsophisticated investors (and that's most of us) are being preyed on here, too.

...The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates.

Tens of thousands of them put money into speculative bets promoted by aggressive financial advisers. The investments include private loans to young companies like television production firms and shares in bundles of commercial real estate properties.

Those alternative investments have now had time to go sour in big numbers, state and federal securities regulators say, and are making up a majority of complaints and prosecutions.

...There are few good statistics on the extent of the problem nationally. But cases are mounting in the offices of regulators like A. Heath Abshure, the securities commissioner in Arkansas, where a majority of the 66 open securities cases involve complex investments sold to less sophisticated investors looking for a steady return.

This story, again, is an illustration of the folly of the beloved Ignorance Caucus notion that we should wreck Social Security and Medicaid and replace defined benefits with vouchers that give money over to Americans to invest for themselves and insure themselves as they choose.

Tags: , ,

Favorite

Speaking of...

Comments (16)

Showing 1-16 of 16

Add a comment

 
Subscribe to this thread:
Showing 1-16 of 16

Add a comment

More by Max Brantley

Readers also liked…

  • Not everyone is in Tom Cotton fan club

    Conservative New York newspaper labels Tom Cotton and others "traitors" for injecting themselves into presidential diplomacy with Iran.
    • Mar 10, 2015
  • Kochs plan to spend $889 million in 2016 campaign

    Breathaking. The political organization backed by the Koch brothers plans to spend almost a billion dollars in the 2016 campaign cycle.
    • Jan 26, 2015
  • Is Arkansas planning to withdraw from PARCC, the Common Core testing consortium?

    Rep. Mark Lowery, a Republican from Maumelle, has introduced a bill that would put the brakes on Arkansas's implementation of standardized testing based on Common Core State Standards. Lowery says the bill is motivated in part because legislators have been told by ADE officials, unofficially, that "the PARCC contract will not be renewed" beyond the current academic year.
    • Feb 3, 2015

Most Shared

Most Viewed

Most Recent Comments

Blogroll

 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation