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Illiquidity may be a blessing in disguise for some retail investors

For those with adequate income and investment knowledge, the constraints of illiquid assets can serve as a valuable discipline

    • Retail investors are trading speculative investments such as binary options and cryptocurrencies. Though liquid, these assets are complex, risky and no safer than the options in private markets.
    • Retail investors are trading speculative investments such as binary options and cryptocurrencies. Though liquid, these assets are complex, risky and no safer than the options in private markets. PHOTO: PIXABAY
    Alfonso Ricciardelli
    Pedram Parhizkari
    Published Tue, Sep 10, 2024 · 07:32 PM

    SHOULD retail investors have access to the full spectrum of alternative assets? This question inspires spirited debate among investment professionals and regulators.

    Illiquidity is often cited as a reason to restrict access to private credit, private equity, venture capital, real estate and hedge funds.

    But the assumption that more liquid assets are inherently safer is misguided.