Here is the opening paragraph:

‘Rigged’ was a deliberately inflammatory adjective used last week to describe the impact of certain high frequency trading on the stock market.  ‘Rigged’ suggests that investors be wary of stocks but, in our opinion, it would be a mistake to forgo the long-term benefits of investing in stocks based on the recent debate over high frequency trading.  This is especially true while the Federal Reserve is deliberately keeping interest rates low (perhaps a more appropriate use of the ‘R’ word).  We believe the choice of assets in the context of a long-term investment plan has far more impact on investment success than whether you pay a penny more or a penny less for the trade.  This is why RiverFront devotes so much time to determining the optimal asset allocations for a variety of risk tolerances and investment horizons.

David Fuller's view

Here is The Weekly View report.

Yes, well managed portfolios are a great long-term investment but that is not the issue with high frequency trading.  ‘Rigged’ is an appropriate adjective for front-running which has certainly been the most profitable aspect of high frequency trading (HFT).  Front-running is usually illegal and always should be illegal. 

HFT is a misnomer in terms of trading, because it is too often high frequency front-running (HFFR), which eliminates the risk of trading by these firms, at a cost to everyone else.  The comment: “a penny more or a penny less for the trade” does not accurately describe the cost of the front-running which has taken place.  Those pennies made by HFT mentioned above add up quickly during the day and can occur many times with each block transaction.  The billions made by HFT firms that were achieved by front-running have been a tax on everyone else in the market.  

I also maintain that HFT firms have exacerbated the speed of intraday and also somewhat longer short-term moves in markets.  This can work for or against investors but has also damage sentiment on occasion and is a problem for traders who rely on their own judgement.

Governance is Everything and I think market officials and regulators have been slow in responding to HFT front-running.  What does it say about their governance when it takes a successful author of financial books, Michael Lewis, to disclose more fully the problem which some people have aware of and talking about for at least five years, even though they did not fully understand the problem?