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Viewpoint: Good Riddance to the Trading Housewives

Ameritrade's TV ads are amusing, but not the one in which the housewife made a quick $1,700 trading biotech stocks.

Empowered by technology and the bull market of a lifetime, a lot of us have become do-it-yourself investors. Trading is cheap, information is plentiful and let's face it, the gains have been there. So who needs a mutual fund manager when this market makes it so easy to look like a genius?

Lately, the do-it-yourself movement has gotten a little help from Madison Avenue. Who hasn't seen the tow-truck driver who traded his way to island ownership via his

Discover Brokerage

account? You gotta love him. He's a symbol of democracy. Move over, suits -- the Street isn't your private club any more.

And yet our tow-truck driver has gotten a lot of flack lately from folks claiming that Discover makes investing look too easy.

Securities and Exchange Commission


Arthur Levitt

let the truck driver have it in a recent speech warning about the "grandiose expectations" drummed up by some advertisements. Yes, some commercials are tongue-in-cheek, Levitt said, adding, "I don't accept tongue-in-cheek" when it trivializes a complex process.

The collision between Levitt and the tow truck created a stir on Internet message boards. The gist of a lot of posts was that Levitt should lighten up. And I agree, at least when it comes to my tow-truck friend.

But Levitt also panned another ad that had been bugging me for weeks. Maybe you saw it on


. Two young mothers are out for a jog. Mom No. 1 sees a clock and says she's got to get home before the market closes. Her friend thinks she means the grocery store -- and this is how we understand she's a little ditzy, because "market" to anyone with half a financial brain these days means stocks, not produce.

Once home, Mom No. 1 logs on to


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while her children bounce off the walls and popgun ammo flies through the air -- anyone with kids will recognize the mayhem. But our savvy trader isn't flustered. She mutters something about "tracking this biotech company I've been looking at," decides she needs to dump it

right then

, and after a few mouse clicks, crows, "I think I just made $1,700." Not to be left out, her ditzy friend shares the fact that


a mutual fund investor.

Now, I like some of the other ads that Ameritrade ran in rotation with this one. And targeting women is refreshing in a brokerage ad -- not to mention a sound policy, considering women make up 50% of investors, according to one recent poll.

But this ad drives me crazy. I've been writing about investments for a long time. And I've got kids. So I know you don't "track biotech" with any degree of competence when children are howling in the background -- much less do you make split-second buy and sell decisions amid absolute pandemonium. OK, maybe the kids are in school when she does her research; maybe she made the sell decision after careful consideration. She's rebalancing her portfolio, perhaps, and was only waiting for a rally to sell into, which caught her by surprise that busy afternoon.

But that's not the impression I got.

The message I saw was that it's easy to pick up a couple of grand by trading complex investments whenever you have a spare moment, a modicum of attention and access to your online account. While the tow-truck driver's message is general (Wall Street's for everybody and anyone can make a killing), the housewife's message is dangerously specific (you can make $1,700 a pop trading biotech stocks).

And what's with the barb about mutual funds? Will someone explain why you're a boob if you want a diversified portfolio managed by someone paid to devote full attention to your holdings just in case you're a long-term investor with something else to worry about most days?

I asked the

National Association of Securities Dealers

, which oversees advertising claims made by brokerages and mutual funds, about some of the recent online investing ads. Tom Pappas, NASD's director of advertising regulation, told me there are some real concerns, enough to send out what's called a "regulatory and compliance alert" at the end of March. The alert cautions brokers against misleading customers about the speed or accuracy of online executions, system access, trading delays or possible loss of capital.

Did the regulatory scrutiny throw cold water on Ameritrade's campaign, I wondered? Spokeswoman Kim Shephard said Ameritrade had indeed pulled the jogging housewives ad out of rotation the week of April 19 but that the decision had "absolutely nothing" to do with any communication from the NASD.

And Peter Horst, Ameritrade's vice president for marketing, says I've got the ad all wrong, but admits I'm not the only one. The spot was meant to make Ameritrade's services look easy, not investing itself. (That's why the housewife says she'd been following the stock for a while.) In the future, however, Horst says, "We'll be careful to distinguish between the speed and ease of the product and the degree of thought that someone should give to the investment process and investment strategy."

As for the shot at mutual funds, Horst claims the ad doesn't take one, that the fund investor is proud -- not sheepish, as Levitt thought, or ditzy, as I pegged her. "We offer more than 7,000 mutual funds on our Web site. The last thing we want to do is denigrate an investment vehicle that we participate in," he says.

Nonetheless, says Horst, "given the issues around the spot," it's unlikely Ameritrade's housewives will be back on the air anytime soon.

And that's fine with me.

Anne Kates Smith is a senior editor at U.S. News & World Report in Washington. At time of publication, Smith had no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks or funds.