“Over the last few years the Financial Industry Regulatory Authority (Finra), the brokerage business’s industry-financed watchdog, has been formally warning investors and retirement savers about the risks of buying into obscure, privately traded investment products that promise high yields. Soon, according to its chief executive, Finra will issue a similar warning about an investment category that generally enjoys a more distinguished reputation: Hedge funds.
Richard Ketchum, Finra’s chairman and CEO, discussed the issue this week at a conference of Reuters reporters and editors; Reuters has the story here. He noted that savers in general, leery of stocks and frustrated with low interest rates, have gotten themselves into trouble putting money in products likeprivate real estate investment trusts and business development companies that invest in privately held firms—vehicles that don’t trade on public exchanges, don’t disclose much about their holdings and….”
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