One argument that I can think of is talented people will instead gravitate towards private industry and are disincentivzed to become public servants. Not owning invidual stock can be common shares is pretty broad. Or otherwise we would have to define what class of investment instrument should be banned. Do we also prevent buying private company shares? What about other financial derivates such as options and futures where you technically don't own the underlying stock? Do we limit real estate investments as well? If they earn a salary, where could they invest their savings? If we allow real estate investment, then public servants (1.8M US Citizens) would blow up the real estate market. There are so many secondary and tertiary effects, that would have major consequences to the economy and the functioning of the government. Not allowing any investment opportunity means they would sucuumb to the inflation rate and cannot retire.