SEC Announces Ban on Most Mutual Funds and ETFs based on DEI
In a stunning financial policy shift, the U.S. Securities and Exchange Commission has announced that mutual funds and Exchange-Traded Funds (ETFs) will be phased out nationwide by the end of the year for violating the government’s new anti-DEI guidelines.
I reached out to the SEC, and a spokesman for the department explained the change.
As part of the regulatory process, we must review securities and ensure that they comply with the applicable law. When we looked at mutual funds and ETFs, we found that they violated the President’s DEI executive orders.
Here are some of the problems that we’ve found:
- Diversity – The very nature of mutual funds and ETFs hold diverse companies. Some of them spread investments across hundreds or even thousands of companies.
- Equity – The mutual funds and ETFs hold equities obviously.
- Inclusion – Mutual fund and ETF companies have purposely included all these companies co-mingling them into one investment.
We are advocating what we call the ‘Single Basket Initiative.’ This initiative aims to simplify the financial system by encouraging Americans to pick just one or two stocks and “really commit to them.” By eliminating mutual fund and ETF companies, we can reduce fraud, waste, and abuse within the SEC.
This has allowed us to immediately reduce government bureaucracy by 50%. Any staff whose Social Security Number ends in an odd number received their pink slips 45 minutes ago. For maximum efficiency, we expect to have them cleared out of the office in the next hour.
We know that this could be a significant change for investors. To help ease the transition, we recommend that they always prioritize rising individual leaders. Forget other opportunities long-term success.
While all of this is staggeringly difficult to believe, I somehow found the last few sentences the most difficult. Since when does the SEC give investors recommendations? That would be like the President turning The White House into some kind of infomercial for a private company. Now that I think about it, prioritizing rising individual leaders does seem oddly specific, doesn’t it?
Avril Phuler, a certified financial planner I spoke with yesterday, was refreshingly candid about the situation. “For decades, we’ve been telling clients to diversify their portfolios. Now we have to call each one and basically say, ‘Remember everything we told you? Do the opposite,’” she explained while frantically crossing out sections of her client presentations. “I’ve already updated my email signature to ‘Concentration is the new diversification.’”
I realize that once again, I’m wading into political waters. In the spirit of appealing to all readers, I want to highlight some important benefits. This new approach simplifies investing greatly. There will be no more rebalancing and no more asset allocation decisions. The spokesman was correct, it is a win for tax payers who are fed up with funding government bloat.
It’s going to take me some time to process this situation and figure out how to move forward. My first thought is to plow money into Warren Buffett’s Berkshire Hathaway. It might be the closest thing to a mutual fund while still retaining its legal (for now) single-stock status.
As the old proverb goes, may you live in interesting times.
