Most people who own shares in individual companies don't really know what they're doing. Should the government set more guardrails?
Markets this year are putting the risk in risk premium. Any asset that typically pays more than a low-risk bond (or zero return) will expose you to losses from time to time, and that happened a lot last month. But that’s the deal: Risk is the cost of potentially higher gains. Some investors take more risk than others. If you face bigger losses than you can afford and don’t get an overall higher return out of it, you need to rethink your investing strategy. And if that describes you, then odds are you own individual stocks. As volatility comes back and the Memestock era ends, it's worth asking: Should retail investors even be allowed to own individual stocks?
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
This piece originally appeared in Bloomberg Opinion