Feb 162013

Should Social Security Be Privatized?

The privatization of Social Security has been talked about for years; last time was during the W. Bush years.

At one time, I think it would have been a good option for people savvy enough to handle their own retirement account.Privatize Social Security

Now?, no way; even savvy investors will have a problem because of the many changes that have occurred when talking about investing in the stock market.

The first problem are with the cheaters or the people who trade on insider information. They can kill a seemingly good stock play overnight. If they have info and they trade against your position, your screwed and there is nothing you can do about it except wait for who knows how long for your position to recover.

Really, in a blink of any eye, there wouldn’t be any retirement left.

The second problem are the computer traders who lease offices right in the exchange buildings. Those guys buy and sell stocks and options with millions of dollars moving in and out of trades in mere minutes, sometimes seconds.  They have sophisticated computer programs that can predict a movement, up or down. And I guess they could use it for long range investing but mainly it’s for movements right now, this second. They can buy and sell in seconds, yes it’s that fast and with the quantity they are buying, they do move markets , I don’t care what anyone says.

Then you have the problem of large companies, like banks who not only advise their clients on investing, but also  trade themselves. Their advisers and their traders talk to each other and believe me, if you place a large order to buy or sell a stock or option, they will check to see if they can make a buck on  the other side of your trade which will affect your trade.

Just think about the pension funds using a bank who advises and also trades for themselves. Pension funds buy huge stakes in companies and to buy or sell before them because you have the information affects the pension fund dollars.

In a nutshell, it is too risky; there are just too many factors against the average investor, for them to trade their own retirement and no matter what one may do to their own account, at least they’ll still have Social Security.

I skipped over a lot of details because I didn’t want to this to get to confusing.

And I want to here your opinions about Social Security;  keep it with the government or trade it yourself in your own account?

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