3 ms·

That could make some sense in 19tg century, but not today, when "building a factory" debts and real estate are owned by publicly traded corporations that litera

That could make some sense in 19tg century, but not today, when "building a factory" debts and real estate are owned by publicly traded corporations that literally anyone could buy shares of. BTW, that's one of the things that make me so excited about DEFI – bringing even more financial instruments previously only available to the rich for wide masses.

dan-robertson 5y ago
To be honest I think only very limited financial instruments should be available to the masses. I don’t even think people should be able to buy single stocks by default [1]. I think people should basically only be able to invest in broad-ranged low-fee index funds, and I guess funds that shift over time from equities to bonds. The problem with many financial instruments being available is that, because there isn’t anything very interesting to say about “normal” investment, someone reading about investing (or talking to some financial advisor trying to sell them something) will think that it is sensible to be picking investments in various new or weird instruments. The incentives don’t work for the cover of every issue of Barron’s to say “yep, people should probably just invest in broad-ranged low-fee index funds”[2]. But maybe it is hard to stop people from foolishly getting involved in these sorts of schemes and instead of weird financial instruments they will be convinced to make “totally safe but high interest” loans to obviously dodgy companies. [1] I might back down from this a bit and allow normal equities but not penny stocks and definitely not options. I’m not suggesting no one should be able to get involved but rather that it should be somewhat inconvenient to do so, eg maybe you need to turn up to some office in person or send in a form and wait 2 months (as opposed to the system of “accredited investors” who just need to be somewhat wealthy, a requirement that cuts out people who could make good decisions while still allowing plenty of dentists to be duped into stupid schemes.) [2] Maybe Barron’s is a slightly bad example as their focus is on financial markets, but you could imagine instead the personal finance section of a regular newspaper.

dan-robertson 5y ago

To be honest I think only very limited financial instruments should be available to the masses. I don’t even think people should be able to buy single stocks by default [1]. I think people should basically only be able to invest in broad-ranged low-fee index funds, and I guess funds that shift over time from equities to bonds. The problem with many financial instruments being available is that, because there isn’t anything very interesting to say about “normal” investment, someone reading about investing (or talking to some financial advisor trying to sell them something) will think that it is sensible to be picking investments in various new or weird instruments. The incentives don’t work for the cover of every issue of Barron’s to say “yep, people should probably just invest in broad-ranged low-fee index funds”[2]. But maybe it is hard to stop people from foolishly getting involved in these sorts of schemes and instead of weird financial instruments they will be convinced to make “totally safe but high interest” loans to obviously dodgy companies. [1] I might back down from this a bit and allow normal equities but not penny stocks and definitely not options. I’m not suggesting no one should be able to get involved but rather that it should be somewhat inconvenient to do so, eg maybe you need to turn up to some office in person or send in a form and wait 2 months (as opposed to the system of “accredited investors” who just need to be somewhat wealthy, a requirement that cuts out people who could make good decisions while still allowing plenty of dentists to be duped into stupid schemes.) [2] Maybe Barron’s is a slightly bad example as their focus is on financial markets, but you could imagine instead the personal finance section of a regular newspaper.