Sec Head Pushes Investor Education
Robert Cyr sees Wall Street as the place to gain his piece of the American dream and wants to make sure he knows what he’s doing.
That put the 25-year-old, who works the second shift at a 3M plant in New Britain, Conn., in the company of investment bankers and securities analysts listening to the nation’s top stock-market watchdog warn about being careful.
Given the market’s recent slide, the timing was just right.
“I don’t know enough about it,” said Cyr, who is interested in mutual funds. “To save up $200,000 to buy a house or whatever is almost impossible without doing some kind of smart investing.”
Cyr was among 850 people at a free seminar at Quinnipiac College in Hamden this week given by the Securities and Exchange Commission, whose chairman Arthur Levitt is on a crusade to educate investors.
Levitt has held 19 town meetings across the nation, including one in Los Angeles two weeks ago that drew 6,000 people.
Those attending the five-hour program at Quinnipiac were offered classes on topics such as investment tips, risk assessment and identifying scams.
Most of those in attendance were over 50. Many had experience with investments, or were in that line of work. But others described themselves as dabblers, or small individual players in the stock market.
“You can’t learn enough,” said Elaine Mrus, of New Haven, who came to the forum with her husband. “I am always interested in making money. You never have enough.”
About half of U.S. households now have some form of stock investment, and $3.5 trillion is invested in mutual funds by U.S. families - more than the amount kept in standard bank accounts, Levitt said.
That’s a huge shift from the markets of a few decades ago, which were dominated by banks, big business and the wealthy.
“The consequence of an uninformed public is potentially destructive to our markets,” Levitt said. “We want to be certain that the public understands that the market goes two ways, that they don’t panic in a down market.”
The SEC, which oversees and regulates securities trading, has set up a World Wide Web site and a toll-free telephone number to field consumer questions.
The agency is also printing pamphlets to explain the stock markets in what Levitt calls “plain English,” and has been working with Congress to pass legislation that would require public companies to do the same.
By teaching people about often-confusing investment concepts like derivatives, Levitt also hopes to save consumers from securities scams. One recently run on the Internet persuaded people to spend $12 million on an eel farm that didn’t exist, he said.
“A huge influx of inexperienced investors, and a real potential for fraud - it’s like tinder and a match,” Levitt said. “I’ve seen too many people’s life savings go up in smoke.”
MEMO: The agency’s Office of Investor Education and Assistance can be reached on the Internet at www.sec.gov or by calling 1-800-SEC-0330.