facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause

Remember the old days when everyone had a stockbroker?

In late October 1886, there was a parade for the dedication of the Statue of Liberty. As the parade marched down Broadway, employees of the stock exchange began throwing ticker tape out the windows. That spur of the moment throwing of ticker tape out of office windows gave birth to the phrase “ticker tape parade.”

In its heyday, ticker tape was the high-tech method of sharing current stock prices throughout the trading day. The tape came scrolling out of a machine on a small, one-inch, continually fed paper. I kiddingly say that people back then must have been better at mathematics than we are today because stocks were traded in sixteenths of a dollar. You just had to know that a sixteenth was 6.25 cents.

In the 1960s, the stock exchange moved to electronic boards with stock prices being scrolled across the screen. It was a big deal and a daily ritual for many retirees to head into a nearby financial service center to watch the electronic stock prices scrolling throughout the day. From those early days through most of the 1960s, investors needed a stockbroker to buy and sell stocks.

Fast forward to today. With a mobile phone, an investor can get stock quotes and company information faster than anyone would have ever imagine not so many years ago.

In 1929, the stock market crashed. In 2008-9, the Great Recession brought the stock market to its knees. And just one year ago at this time, the stock market tanked thirty percent before an incredible year-end rebound. 

Throughout all these years of stock trading, technology has steadily improved and regulators have had to make adjustments to keep up with it. That being said, it often feels like regulation is a step behind the changes. 

Recently, a group of speculators got together to take out some hedge funds. Their efforts put the financial markets in turmoil. The near meltdown prompted newly appointed Treasury Secretary Janet Yellen to call a meeting of various regulatory agency heads. 

She wanted to get a handle on the issue of whether a group of small investors banding together on social media should be considered collusion.

My financial advisor peers and I go to great lengths to know our clients. In order to guide our clients along the appropriate path, it’s essential for us obtain relevant financial information. For example, steering an elderly person or couple on a fixed income into a speculative, high-risk investment would be totally wrong.

In our current environment, an individual living in his or her parents’ basement with minimal or no financial experience can pretty much do whatever they want when it comes to investing. With a computer or mobile phone, they can open a brokerage account and buy or sell just about any stock. It doesn't matter if it’s high risk or if they have little or no savings.

I’m all for people having the ability to make their own decisions in life, but I’m also a proponent of investor suitability. For instance, is it appropriate for someone carrying significant student loan debt and living paycheck to paycheck to make a speculative investment?

At the end of the day, I think it begins with financial education to help build a solid foundation to understand our complex financial world. 

Know Someone?

Do you know someone who would like to meet with a financial advisor?

Ken Morris 248.952.1744

E-mail your questions to kenmorris@lifetimeplanning.com.

Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.