Governments use tax to change behavior

Securities are never immune to the interference of central government. There is a saying among financial experts that you can work out the policies of a government by looking at the tax code. Those who participate in the securities market are not immune to this truth.

If the government so wishes, it can completely crush a certain sector of the securities market. The big bosses know this and so they make sure that they do not do anything to jeopardize their relationship with the politicians.

You are only as rich as the security tells you

The ownership of a security should be a priority of the first order. If there is any hesitation or ambiguity about who actually owns the security then you could be in for a long wait while the mess is being cleared up. Some people buy securities when they are not conversant with the procedures of what they can and cannot do with the security once it has been bought.

Ignorance is no defense here because no one will listen to you in any case. If in the cold light of day the security document says something different from what you are asserting, the authorities will be far more inclined to go with what is on the security.

The waiting game with a purpose

You may be required to wait for quite some time before you can liquidate your securities. In fact the maturity timescales of some securities are so long that the owners die before they come to the end of their process. This means that you have to plan ahead if you are going to buy a security.

For example if you are quite ill with a terminal disease then you should be aware that in all probability you will not be around to see the maturity of your security that you buy now. This could have implications for the way that you write your will. This is the kind of long term thinking that is essential for the securities market.