Thursday, September 24, 2009

FINRA blows investors money

The Financial Industry Regulatory Authority or FINRA, which regulates the brokerage firms, lost 27% of its money last year.

Their investments?

Hedge funds, private-equity funds and stocks.

So what did they do this year?

They got out of stocks in April.

And what did stocks do?

They rallied 55% from their lows.

So much for long term investing. From the people that regulate brokerage firms. That preach buy and hold, when they do the opposite.

Buy and fold!

What was their investment mix?

50% for stocks and private equity.
20% for hedge funds.
15% in real estate and commodities.
15% in fixed income.

So in April, just when the stock market was rebounding FINRA did the switcheroo. Let's get conservative!

They lowered the "risk" in their portfolio.

So FINRA, which regulates brokerage firms and stock -brokers, showed the world that they don't know what the hell they are doing. And they also showed the world, that they don't believe in buy and hold, even though that is what they preach in their examinations of brokers and firms.

Buy and fold!

They new mantra of FINRA!

That should help every broker in arbritration.

Overseen of course, by the new watchdog of the SEC, Mary Shapiro!


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