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**AbraroLib** · 05-14-2008, 06:38 AM

When those BBB rated brokers (IB, Etrade, and etc) go under, your assets may very likely be trapped. When multiple creditors fight for the same piece of assets, things can get ugly, as many Refco customers had experienced in 2005.

FDIC is all but a sham: they can let you wait up to 7 years to get your principal back, and if there is major inflation in between, good luck to you.

Fidelity represents the ultmate safe brokerage house because:

1. Its main business is money management, which unlike banks never carries fixed obligations to its customers, and money management is a damn low-risk high margin business.

2. Fidelity doesn't carry any debt. A debt free company cannot go bankrupt.

3. Fidelity is a privately owned company, and is never forced to grow or meet Wall Street estimates. That means it can be managed conservatively and doesn't have to dabble in risky businesses in order to grow. Etrade wanted to grow at any price, went into the mortgage business, and met their demise there.

05-14-2008, 06:38 AM	#18
AbraroLib Join Date Oct 2005 Posts 402 Senior Member	When those BBB rated brokers (IB, Etrade, and etc) go under, your assets may very likely be trapped. When multiple creditors fight for the same piece of assets, things can get ugly, as many Refco customers had experienced in 2005. FDIC is all but a sham: they can let you wait up to 7 years to get your principal back, and if there is major inflation in between, good luck to you. Fidelity represents the ultmate safe brokerage house because: 1. Its main business is money management, which unlike banks never carries fixed obligations to its customers, and money management is a damn low-risk high margin business. 2. Fidelity doesn't carry any debt. A debt free company cannot go bankrupt. 3. Fidelity is a privately owned company, and is never forced to grow or meet Wall Street estimates. That means it can be managed conservatively and doesn't have to dabble in risky businesses in order to grow. Etrade wanted to grow at any price, went into the mortgage business, and met their demise there.
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