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Investment represents one of the most important resources in generating wealth from the point of view of the investor. From the investee’s point of view, this is equity capital utilized for working or permanent capital purposes. Thus, there is a need to plan, organize, direct, control or carefully manage all phases of the investment continuum to make sure funds are safe and secure in the hands of profitable, liquid and stable investees.

The frauds, investment scams and aggressive investment derivatives that has plagued Wall Street and spawned the global financial crisis since 2008 are hard lessons for investors who bore the brunt of the financial tsunami. With the growing risks and uncertainties in the competition for investible funds and the expansion of credit that has made business more complex, the need to establish a strong regulatory environment is critical both to the investor, the government and society in general.


While there is a need for the government to establish and sustain a robust economy, there is an equally compelling need to put up a strong regulatory environment of investment to protect and maintain investor confidence (SEC, 2009). What therefore are the principal risks that investors face? With the various investment black holes occurring on Wall Street and elsewhere, are investors really adequately protected by the regulatory environment?

With the risks and uncertainties facing investors, how else can the investor protect himself from the new forms of investment problems that may be spawned anew by the emerging investment climate? The average investor indeed is faced with the growing apprehension over the uncertainties that may yet come and obliterate whatever is left of their hard-earned money. What investment strategies are therefore available under the current regulatory environment?

The saga of various investment opportunities around the globe is open and unlimited with the dissipation of the boundaries transcending economies. Globalization is a phenomenon investors cannot ignore as this lays down the opportunities available them. Initially, the government through the Securities and Exchange Commission has established what are considered necessary regulatory implementation guidelines and measures to correct, prevent even plug the holes of aggressiveness in the securities, equities or capital markets since the Great Depression back in 1933.

Although the SEC, the Federal Reserve Bank and the Federal Deposit Insurance Corporation (FDIC) has displayed responsiveness over every economic and financial indiscretions in the market, opportunities for every malevolent machinations has apparently not dried up for certain sectors who continue to design and devise ways of acquiring windfalls in between. This is aside from the unforeseen economic phenomenon that is uncontrollable, hence is inherent and unavoidable.

This brings us to the conclusion that loopholes and weak areas in the financial system continue to pervade the market awaiting some form of trigger mechanism to unleash another wave of investment debacles to haunt vulnerable investors. Hence, investors have started to be wary of two critical factors in investment: the return on investments and the risk of not meeting their investment expectations. (DelaTorre, 2006).

Investing is relatively an uncertain undertaking – the rate of return should be sufficient to recover the interest or cost of borrowed funds plus a spread “to compensate for the risk associated with the commitment of equity funds or capital” (Collins & Devanna, 1992) Thus, the government continues to adopt measures to address certain systemic risks to sustain investor confidence in the market; information symmetry and transparency to create an environment of fair market efficiency as well as encouraging innovation and diversity through market access and competition (Levy & Post, 2005).

The above factors continue to become the rationale of the regulatory environment. These are however becoming ineffective to control the new systemic risk confronting the investment climate—that is, the growing aggressiveness of investment users in a mad scramble for financial and market gain. Despite measures adopted by the government sector, the regulatory environment has become pervasive to the point of being restrictive.

Since 1933, the government has enacted and implemented about 34 regulatory measures to impose market discipline. Perhaps in a desperate attempt to impose discipline on a market played by both ethical and unethical players, the government has spent more efforts to restrict the arena only for those investees who can bear the brunt of any economic crisis and rarely to plug the holes for malevolent market players.

Thus, it appears that the regulatory environment tend to discourage more the legitimate investors than protect them. That is, in the process of protecting this sector, the legitimate ones become less protected sector. It is not enough that investors be wary of returns but must consider equally the degree of uncertainties and risks that may intrude into the investment processes and cycles.

Hence, there is a need to identify exactly the amount freely to be invested to avoid too much speculation and expectation, the manner by which investment is to be undertaken either through the open and closed-end kind, diversification or investments to allow stable returns and to avoid risky fund concentration in a few types of funds, avoidance of hedge funds managed by unknown fund managers, the selection of the medium or funds manager and advisor who can provide an impact assessment of investment “what ifs” to which the investible funds will be entrusted.

Long term investment must be limited to government- guaranteed bonds. Being aggressive must be tempered with conservative stance as amount and period of investment becomes close. Starting early the investment process requires lesser amount needed to accumulate a target amount. This is especially applicable to preneed investments like retirements, college plans etc. Time is money as well. Likewise, there is a need to be constantly aware of the risks and returns inherent in investments (Gitman, 2003). Avoid high risk investment like stocks and mutual funds, hedge funds and futures.

Low risk investments include bonds, bond mutual funds, US treasury bonds, time deposits to the extent of the insurable amount. Similarly, it pays to evaluate and reevaluate investment vehicles periodically prior to funds deployment especially the tax aspect. Historical performance is not a guarantee of returns but always be informed about prevailing market figures and how to conservatively hedge risks against natural and artificial risks. Reference list Collins, E. and Devanna, M. (1992) The portable MBA, New York, John Wiley & Sons, Inc. Gitman, L.

(2003), Principles of managerial finance, 10th Edition, International Edition, Addison Wesley Hawawini, G. & Viallet, C. (1999) Finance for executives: Managing for value creation, Cincinnati, OH, Southwester College Publishing. Kantrowitz, M. (2009), Investment Strategies, Retrieved: April 9, 2009, website: http://www. finaid. org/savings/strategies. phtml; FinAid Page, LLC. Levy & Post (2005), Investments, New Jersey, Pearson Education Limited. SEC (2009), Investment Advisor Public Disclosure: Retrieved April 10, 2009; website: http://www. adviserinfo. sec. gov/IAPD/Content/IapdMain/iapd_SiteMap. aspx

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