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Novel financial instruments
Old 11-12-2019, 10:28 AM   #1
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Novel financial instruments

Any ideas for one? Any interesting ones of the past or from other countries?

I was thinking maybe there should be one where an investor promises to buy a certain amount of stock by a certain date without specifying what stock, and gets a discount that's guaranteed by the government. It could help even out stock market fluctuations because some people would reach their deadline and have to buy in a down market. "Active trader" status, like Fidelity has, and "professional trader" which I think is a legal designation, come closest.
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Old 11-12-2019, 11:13 AM   #2
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Supply and demand and free markets are plenty novel for me.

It would be "novel" to purposely hit my hand with a hammer, but I'll pass on that as well.

Suggestion: Spend less time (as in zero time) thinking about this. Go and buy and hold a broad based index fund, and then go do something more useful. A nap would qualify.

-ERD50
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Old 11-12-2019, 11:17 AM   #3
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That's basically a futures contact with a little twist.

But, why should the government care, or look to spend money on it?
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Old 11-12-2019, 11:19 AM   #4
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Any ideas for one? Any interesting ones of the past or from other countries?
Well, in keeping with the thread title and looking at interesting ideas from history, how about tulips?
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Old 11-12-2019, 12:15 PM   #5
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Old 11-12-2019, 12:30 PM   #6
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How about an annuity shared by subscribers to a loan or common fund, and have the share value increasing as subscribers die until the last survivor enjoys the whole income.
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Old 11-12-2019, 12:39 PM   #7
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I don't see how this would help or work. If the "promised buyer" can buy anything they want, it would unlikely be a stock thats dropping like a rock... the money from the falling market would be going into whatever is perceived as the current safe haven... the "promised investor" would do the same.
Besides. Propping up equity markets is the Feds job. They have the printing press let them do it. Otherwise it sounds like a mandatory "bail-in".
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Old 11-12-2019, 01:54 PM   #8
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I don't see how this would help or work. If the "promised buyer" can buy anything they want, it would unlikely be a stock thats dropping like a rock... the money from the falling market would be going into whatever is perceived as the current safe haven... the "promised investor" would do the same.
Besides. Propping up equity markets is the Feds job. They have the printing press let them do it. Otherwise it sounds like a mandatory "bail-in".
Recently with the up market I read some pessimists talk about how it's the safe stocks that were up, like J&J or whatever. It seemed that this had to be brought to people's attention because some people were just looking at the S&P without looking deeper. So, let the "promised buyer" buy J&J. It could prevent the S&P from looking bad and cushion the blow in, I think, a more natural, consumer controlled way than the fed messing with interest rates.

To clarify...an investor buying this instrument would be more likely to be holding cash that would in some cases be used to by stock once market is worse. Without the instrument, an investor wouldn't have it all in cash. They'd have some invested safely at a time when the market is less bad and they wouldn't be obligated to put it in safe investments (like J&J, helping the S&P) when the market is worse.

I bet the more options there are, the smaller the dips would be. The nature of the options doesn't even matter much.
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Old 11-12-2019, 10:04 PM   #9
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How about an annuity shared by subscribers to a loan or common fund, and have the share value increasing as subscribers die until the last survivor enjoys the whole income.


Sounds like a death pool/tontine:
https://en.wikipedia.org/wiki/Tontine
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Old 11-12-2019, 10:20 PM   #10
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How about something that lets me hedge future tax rates on a tIRA?
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Old 11-30-2019, 06:49 PM   #11
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I want an ETF that doesn't focus on a specific trading style. The goal should be good stock picks. This doesn't mean the fund would invest in something that wouldn't likely pay off until 3+ years in the future, or that 90% of its assets would be put in one thing, there should be some moderation, but I don't want something as specific as the funds I've seen.

The closest category in the ETFdb.com Categories list would probably be All cap equities:

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All cap equities ETFs are funds that invest in equities of all market capitalizations. These funds may include micro cap, small cap, mid cap or large cap stocks.
That's fine and it kind of describes how I trade but the funds that I looked at in that category all seem to specialize further. If I had an amazing track record and wanted to get a job stock picking for an ETF, I wouldn't know of any ETF that would be a good match.
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Old 11-30-2019, 06:58 PM   #12
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Well, in keeping with the thread title and looking at interesting ideas from history, how about tulips?
how about pet rocks
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