Most people gripe about the rich getting richer and statistical data appears to provide strong evidence of an ever-widening rich-poor divide. Whether in a down or up economy, the rich, with easy access to financial advisers and most financial products, can make money. As for mere mortals, we can either hope for a strong savings rate or a bull stock market. Why?
Because exotic financial products are only available to the sophisticated investors or the private wealth. Expecting rates to go lower? Get an inverse floater. Not from your local retail banks though. Enhanced yield in time of low rates? Get a leveraged bond or super senior tranche. Expecting bad credit/equity news for a particular company. Shucks, as a retail investor, contra is not exactly a good/wise idea and there are high transaction costs associated with short selling. Not for the sophisticated who can buy protection via the credit default swaps market.
So this article caught my attention - "There Has Never Been a Tougher Time to Be Wealthy". Hmmm, must the regulators coming down hard on the wealthy. No way, it's actually about the increased cost of desired items - for the wealthy. What a letdown. If this is going to bother the rich (well, probably just a tickle), what's for the heartlanders?
No comments:
Post a Comment