High-frequency traders not to blame for ‘flash crash’ Advisers must help clients plan for health care costs

Although I enjoy and appreciate your publication in general, I find the lack of understanding appalling in the editorial “High-frequency trading merits close examination” (May 24).

First of all, an open, free, unimpaired and liquid capital market system is the crown jewel of a society organized around the principles of liberty. Speculation and risk bearing promote liquidity for initial-public-offering holders, and capital formation facilitates the process of risk transfer and moves prices toward true value through the process of discovery.

It is remarkable that you suspect that high-frequency traders were responsible for the “flash crash” when in the same breath you admit that they shut down their computers prior to the big sell-off.

At the end of the day, prices move because people want to buy and sell. Their motives, reasons and strategies are very different.

However, they are all attempting to profit from mispriced risk.

A market dip of that type was clearly caused by any numbers of fears, portfolio decisions and strategies, all intersecting at one particular time frame. It is nothing more than human behavior on display.

But if we want liberty, who decides whether someone is trading “too much” or “too fast”?

Is it the Securities and Exchange Commission (the Lord forbid)? Is it Congress?

Are certain strategies now going to be banned because they are now defined as “high-frequency?”

Give me a break!

If we want to have transparency and liberty, then you are going to have volatility.

Smoothing volatility isn’t a legitimate concern of the SEC, Congress or anybody else. Their only concerns should be fraud and lawbreaking.

Let us not advocate the intervention of government authorities who created most of the problems that they are attempting to solve. Crybaby long-only mutual fund managers are simply going to have to learn how to buy and sell more effectively if they are to retain their client base.

But this will never happen by banning legitimate market activity that happens to expose others’ foolish strategies.

Craig A. Matson

Partner

Vineyard Equity Partners

San Antonio

Editor’s note: The point of the editorial is that flash traders contributed to the plunge first by initiating the selling and then withdrawing liquidity from the markets by shutting down the computers after everyone else was in a panic. Such traders say they provide liquidity; in this case, they withdrew it.

I read with interest your Lifestage special report “Making the most of the middle” (June 21).

I couldn’t agree with you more; there are so many issues for the sandwich generation and even those who are a little younger and a little older.

As a health care consultant, I have seen the importance of health care within any comprehensive retirement or comprehensive plan. Although there are some financial advisers who are conversant on health care issues, most aren’t, so merely telling them that they should incorporate this into a strategy isn’t enough.

There are several components of health care that need to be considered in planning for expenses: family and dependent care, Medicare and its supplements, and the availability of post-care retirement, to name a few.

The Patient Protection and Affordable Care Act of 2010 may help, but that remains to be seen.

Retirees, pre-retirees and individuals must still plan for health care.

The more knowledgeable an adviser is about the nuances of health care expenses, the better off the client will be.

Ellen Breslow

Managing director

EAB HealthWorks

New York