Risk of Investing

Left-leaning politicians and the media mistakenly, negatively criticize the risk of derivatives, losing sight of the fundamentals of the subject.

The truth is, many investors seek risk, the riskier the better. They weigh risk against the added return they get from that risk. Sometimes the added return comes from short selling, or betting prices will fall.

In every transaction there is a buyer who wants in and a seller who wants out. When sophisticated buyers and sellers are available, as in derivatives, why is the government the arbiter of risk?

As far as the non-sophisticated are concerned, the media’s job is to explain the basics, so the masses keep away from what they are not familiar. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)