You raise an interesting issue: Should the state pass laws to protect people from their own ignorance and poor judgement?
I tend to support laws that make people wear seat belts and bicycle helmets. While individuals may bear the pain and expense of their decision not to protect their own safety, society pays a cost when individuals unnecessarily use up scarce medical resources.
The same case might be made to support laws to protect investors.
Individuals may directly bear the cost of their own poor investment decisions, but there are on costs to society in the form of slowing economic growth, lost tax revenue, the cost of bank bail outs and other government remedies.
