GameStop Mania Was the Wrong Way to ‘Democratize’ Finance

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Heard on the Street: Making financial markets accessible is about ensuring low costs for savers. Allowing anyone to trade complex products could undermine that goal.

The real political fallout, though, may be to come. Officials are investigating financial misconduct, particularly by brokerage firms thatlast week. Politicians on both sides of the aisle lamented that professional speculators were protected at the expense of small traders. Brokers said they only took action because of risk limits imposed by clearing firms.

The S&P Dow Jones SPIVA index, which tracks active funds, shows that 78% of large active funds in the U.S. underperformed the S&P 500 over five years. Hedge funds’ access to shorting and other complex trades doesn’t appear to give them an edge: The Eurekahedge Hedge Fund Index has returned 65% over the past decade, compared with 250% for the S&P 500.What do you think will be the long-term implications of the GamesStop mania? Join the conversation below.

Research overwhelmingly shows that day traders tend to lose relative to more patient holders. From January 2000 to December 2019, investors who missed out on the best 20 days of the S&P 500 made zero returns, according to J.P. Morgan Asset Management. Also,of over 68,000 accounts on a Dutch exchange found most investors made “substantial losses” from options, much more than on stocks, and were doing it mostly for entertainment or gambling.

 

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Poxel next french biotech $$$

If the explanation regarding a financial product is uneccessarily complex, there's a non negligible risk that it's a scam financefordummies

RTM_221B yachi feeler wallstreet😂😂😂

Awe, is WallStreet sad about the new investors?

Let the peasants trade iron condors.

“Allowing anyone to trade for complex products could undermine hedge funds’ goal to manipulate the market and destroy Wall Street.” There fixed it for you.

By these standards, individuals shouldn't be able to acquire loans because they don't understand how they work and might lose money.

But, insider trading is not democratisation, its stealing.

Is this a joke ?

Young people are starting to get in on the money printing brrrrrrrrr

There's nothing low cost about the current market.

“Complex products” = you kids let the adults handle this

'Savers' = the 1%

Translation: “Y’all figured out how to say trade and fuck our world up. So now we are trying to justify keeping you pesky peasants from engaging in trades.”

🤡

Ya think 🤦🏼‍♀️

😂😂😂

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