Amateur Investors Get Burned By Wall Street’s Hottest Trade

The availability of such products to individual investors is part of a trend that has given people more control over their finances and retirement. It has also exposed more of them to getting ripped off, said Tyler Gellasch, executive director of Healthy Markets Association, a Washington-based investor-advocacy group.

“We don’t want to deny ordinary Americans the ability to trade in ways that can help them,” Gellasch said. “At the same time, these things are very complicated, they can really blow up.”

Still, the Securities and Exchange Commission “doesn’t really ever look at whether an ETF is a ‘good idea’ or ‘risky’ for investors, but rather focuses on the mechanics of how it operates and the accuracy of its disclosures,” Gellasch said. “The agency doesn’t generally pass judgment on the risks or wisdom of a product. An accurately described time bomb for an investor could be approved.”

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