January 27, 2007
I recently became aware of the SEC's consideration to raise the bar of an accredited investor from $1,000,000 net worth (including your home)to $2,500,000 (excluding the home).
Philosophically, I believe that it is not the job of the federal or state or local governments to decide what an investor may or may not invest in.
I don't believe that having "X" dollars of assets correlates to a certain level of sophistication in investing.
I also think that the "average" investor has lots of places to lose money notwithstanding the accredited investor rules, including the FOREX exchanges, commodity pits, and sometimes the most volatile of all, common stocks and bonds, both seperately and in mutual funds.
While I think it is laudable to watch out for citizens money (most of which somehow ends up with the government), I don't believe that allowing only the wealthy to invest in a wider range of vehicles is fair to those who are lesser endowed (in a financial sense of course).
I would note that in England, there are essentially no net worth requirements for these vehicles.
The SEC proposal would knock out roughly 88% of all investors who currently use alternative investments.
Please reconsider this raising the bar, and consider doing away with it completely. I can't think of any evidence that shows that these investor limitations have been to the benefit of anyone.
Thank you,
Michael Singer, M.D., President
Singer, Leemon Associates, Inc.
A Registered Investment Advisor