Pension funds in China now allowed to invest....this is out of control

[jsp326]

Really? Any more reckless than allowing 401k account holders to trade futures and options contracts in the US?

Uh, where can Joe Blow employee trade futures/options in his company's 401(k)? If that's happening, I'm sure not aware of it.

If you're talking about self-directed IRAs/401(k)s, that's a whole different category. The average clueless investor knows nothing about them. They're used by more sophisticated types for real estate, managed futures, etc.

 

[volpunter]

I am no expert in this field but I hear even qualified plans allow trading in almost any asset class, including futures. At least the IRS imposes very few restrictions. What matters is what the plan sponsors are saying.

By the way it was just an extreme example to make a point. Fact is that US based pension funds (even state funds) are engaging in way riskier investments than Chinese pension funds now picking up equities.

Uh, where can Joe Blow employee trade futures/options in his company's 401(k)? If that's happening, I'm sure not aware of it.

If you're talking about self-directed IRAs/401(k)s, that's a whole different category. The average clueless investor knows nothing about them. They're used by more sophisticated types for real estate, managed futures, etc.

 

[Pricechange]

Yea..China right now just like the US in the end of the roaring 20's. Margin flowing like water, no division/rules/regulation between different financial institutions regarding risking people's life savings, every tom dick and hairy buying risky stocks without knowing anything about the investments, rags to riches stories everywhere.

It all ends in a 10 year great depression and another WW

 

[volpunter]

oh gosh, yes world war and 10yr depression. Dude, you gotta be dreaming. China sports >5% growth rates, while most likely the Fed and ECB pushed the West into a 20 year going-no-where zone. Nothing in the Western financial system has been cleaned out. You are reading too much war stories my friend.

Yea..China right now just like the US in the end of the roaring 20's. Margin flowing like water, no division/rules/regulation between different financial institutions regarding risking people's life savings, every tom dick and hairy buying risky stocks without knowing anything about the investments, rags to riches stories everywhere.

It all ends in a 10 year great depression and another WW

 

[Pricechange]

I will take the other side of your trade here. Selling Shanghai index short to volpunter Aug 24, 2015. I will cover in a few years...holding this short LONG TERM

 

[volpunter]

for a longer-term trade I am comfy with that. In the meantime I still hold my SPX shorts from 2095 levels against those longs.

I will take the other side of your trade here. Selling China short to volpunter Aug 24, 2015. I will cover in a few years...hold the short LONG TERM

 

[jsp326]

I am no expert ...By the way it was just an extreme example to make a point.

No, you're just wrong. Is it that hard to admit?

Standard 401(k) account holders can't trade futures or options.

 

[volpunter]

http://www.investopedia.com/articles/retirement/11/impermissable-retirement-investments.asp
http://wealthblackbox.com/category/trading-in-ira401k/
http://www.ehow.com/info_7876896_can-trade-futures-retirement-account.html

Looks like all those (and those just came up on top of a simple google search) contradict your claims.

No, you're just wrong. Is it that hard to admit?

Standard 401(k) account holders can't trade futures or options.

 

[jsp326]

http://www.investopedia.com/articles/retirement/11/impermissable-retirement-investments.asp
http://wealthblackbox.com/category/trading-in-ira401k/
http://www.ehow.com/info_7876896_can-trade-futures-retirement-account.html

Looks like all those (and those just came up on top of a simple google search) contradict your claims.

Uh, no. All of them reinforce what I said. The first article states "These accounts are not limited to the narrow selection of investments that are typically offered inside employer-sponsored retirement plans, such as 401(k) or 403(b) plans." The other articles say something very similar. Just some good ol' Reading Comprehension 101.

Joe Employee can only trade mutual funds in his IRA. He doesn't know anything about self-directed retirement plans, and never will. Most of the public doesn't even know what an ETF is, much less a self-directed 401(k) -- which you'd have to own a business to have.

 

[volpunter]

"Prohibited Investments
The list of investment vehicles that cannot be housed inside an IRA or qualified plan should not be confused with the list of prohibited transactions that cannot be done with these accounts, such as lending yourself money from an IRA. When asked about the types of investments that can be used inside IRAs and other retirement plans, most instructors and experts in retirement plans will simply list the disallowed vehicles and then add the caveat that everything else under the sun is permissible."

-> IRS does not prohibit trading in futures and options in 401k, including employer sponsored plans. It is the plan sponsor and custodian that imposes stricter limits. Some firms do impose stricter rules, others do not.

"
Account Rules

• The IRS does not expressly prohibit futures trading in IRAs, 401ks or other qualified retirement plans. The IRS, however, does not always have the last word as to what is or is not allowed in a particular retirement account. 401k and other plan sponsors may restrict trading in individual accounts as much as they like, and most offer a limited selection of investment options. In the same manner, many companies who offer IRA accounts place restrictions on types of investments to reduce their liability. If you want to trade futures in your IRA or 401k, the key term is "self-directed." Self-directed accounts allow you to take complete control of your investment choices and typically allow futures and futures options trading."

-> Same here: No law prohibits one from trading futures in 401k accounts. It comes down to the specific sponsor.



And that your average employee can only trade mutual funds is utter bullshit. Almost every sponsor allows trading in equities and ETFs to start with. Some allow derivatives positions. You are totally misinformed it seems. And just because you know shix about markets does not mean everyone else does not know either. The volume in ETFs to a large degree originates from retail. Whom are you trying to kid here?

Uh, no. All of them reinforce what I said. The first article states "These accounts are not limited to the narrow selection of investments that are typically offered inside employer-sponsored retirement plans, such as 401(k) or 403(b) plans." The other articles say something very similar. Just some good ol' Reading Comprehension 101.

Joe Employee can only trade mutual funds in his IRA. He doesn't know anything about self-directed retirement plans, and never will. Most of the public doesn't even know what an ETF is, much less a self-directed 401(k) -- which you'd have to own a business to have.