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The caricature of investors as "the wealthy" is not connected to reality. If you are interested in having a retirement, you have a stake in the game - even if y
by abtinf 10y ago
The caricature of investors as "the wealthy" is not connected to reality. If you are interested in having a retirement, you have a stake in the game - even if your entire plan is to rely on social security, someone has to make the money that will be taken and given to you. If you have an interest in a high standard of living or low cost of living, efficient investment decisions are vital to you.
When you hire someone, whether to mow your lawn or run your fortune 500 company, you want their work effort to be aligned with you objectives. Ideally, every employee you hire is aligned with your interest, but that is impossible. This is a hard problem with a huge body of research behind it. If you would like to learn more, look up the "agency problem".
With regard to the ability to easily change investments - that is simply not true for the massive companies you are talking about. As an individual investor, you can shift capital around easily because your decisions have a negligible impact on the market as a whole. However, over 70% of the stock market is held by institutional investors, whose decisions significantly impact market prices.
Stock prices reflect the long term prospects of a company. Shareholders are merciless in punishing companies that optimize for the short term over the long term.
- kobeya 10y agoInvestors in early-stage, non-public companies is pretty much limited to "the wealthy" in the U.S. due to regulatory restrictions.
- robotresearcher 10y agoParent said "When you hire someone [to] run your fortune 500 company...".
- ryankennedyio 10y agoFor good reason, crowdfunding is really quite terrible (not the kickstarter kind): https://www.bloomberg.com/news/articles/2016-11-07/you-too-can-invest-in-a-startup-likely-to-go-bust https://www.bloomberg.com/news/articles/2016-11-07/you-too-c...
- bshanks 10y agoTerrible? Is the expected return negative for large portfolios of crowdfunded companies? I ask because it's possible for expected returns on a portfolio to be good even if the the typical outcome for any individual investment within the portfolio is to lose all of the money in that investment.
- gech 10y agoI reject this entire post. Stock prices reflect the day to day movement. At most the consideration is quarterly. New ceos are commonly brought in to cut costs by degrading internal resources for quarterly bumps. Retirement stakeholders have no say in this.
- crdoconnor 10y ago"The caricature of investors as "the wealthy" is not connected to reality." Because you think the wealthiest top 5% owning 82% of all stocks isn't an accurate statistic? Or because you think the top 5% are not what you'd consider "wealthy"?
- mmjaa 10y agoMore than likely, its because they've got skin in the "keep CEO's great" game, and want to obfuscate the issue being discussed before it devolves into "coz Marxism sucks" ..