Recent Movies Highlight Problems Small Investors Face

These past few years has seen a wave of movies that focus specifically on the corruption of the stock market and the disadvantages that small investors have compared to large financial institutions and accredited investors.

Movies like the “The Big Short”, have highlighted the effect that large investment institutions have on the economy, and how one mistake may mean lost profits for one firm but may also an economic disaster for everyone else.

The “Wolf of Wall Street”, showed how corrupt stock brokers profited off of trading fees, whether or not their clients made money. Today, the real Jordan Belfort is said to have a net worth of -100 million because of all the money his firm defrauded investors.

Although both these movies are fictionalized versions of real events, they do touch upon real problems that small investors face in today’s investment market.

Real Problems That Small Investors Face

In the light of another recent financial movie, “Money Monster”, Brad Reifler touched upon a few of these problems: like fees, access to investment, and stock market risks.

Small investors are often charged high fees, regardless of the performance of their portfolios. These fees can be found in both discount brokerages (which do not provide any financial advice) and firms that personally manage investments.

Due to a decades-old regulation of who constitutes the definition of an accredited investor, most small investors do not even have access to a lot of different types of investments.

Then there is the issue of stock market risk. Since small investors can typically only invest through the stock market, then their returns are correlated with the performance of the market, which significantly increases the risk that they have to take.

Brad Reifler has three decades of experience in the investment market. He has founded several investment firms, like Pali Capital and Reifler Trading Company, and is currently serving as the CEO of his latest company: Forefront Capital.

Reifler has spent years focusing on the plight of unaccredited investors, and in response to a system that he views as unfair, he has developed a trust specifically geared for small investors: it charges no management fees and is not correlated with the stock market.

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