It’s a given that many people will not have enough money to retire unless they invest. But for those who have excess cash, it’s impossible to find a place to put that cash that will give them a predictable 8% return.
Hedge funds — who can buy insidery information through questionnaires that bank analysts answer for them — have no such problem, though. And that realization does nothing to reassure the average investor that markets give them an equal shot.
Instead, this legally murky practice joins others we know of — like letting high frequency traders buy and front-run orders for securities before they are executed — that reinforce the notion that stock investing is not for the 99%.
The New York Times reports on the practice of banks answering questions about their analysts’ views on individual stocks for their big hedge fund clients before giving that insight to the general public. That’s valuable — allowing possessors of this information to earn well above average investment returns.