When I buy and sell stocks, I do it through a brokerage, so the stocks aren’t owned by me directly. This creates a single point of failure for me if the brokerage goes under for some reason. I can’t imagine with billions of dollars you would tolerate that kind of single failure point, so how do these guys do it?
In: Economics
Just because a brokerage goes bust, doesn’t mean you lose your stock ownership in a company. This is where regulators are important, and would step in and facilitate the change of that ownership over to another brokerage.
I won’t speak to how guys like Warren Buffett do it, but guessing he has his money spread across many different brokerages and different private funds. When you get to the next level of wealth, much of your money isn’t directly in brokerages but rather different privately managed funds and investments.
Latest Answers