I am writing to express serious concern over FINRA Regulatory Notice #22-08 and the prospect of restricting my ability to invest in these leveraged products. I am a retail investor that has done significant diligence on these products. I understand their risks, I understand the concept of volatility decay, and yet as a relatively small time investor I've been able to enjoy significant returns with these products by employing relatively simple strategies. The warnings are out there on these funds and I was concerned before diving in. I did my diligence though. I charted years of UPRO data vs. SPY, I read up on and analyzed volatility decay and some of the challenges with holding the stock longer term, and I understood the compounding nature of triple leveraged losses in a downturn. I understood all the risks but I also recognized that at the end of the day the ETF tracked the underlying S&P. Armed with my diligence, I saw the COVID crash as an opportunity to jump into UPRO. The market in my opinion was over-sold and given my time horizon (not needing to be liquid in the next 10 years off that investment), I jumped in and bought UPRO. As suspected, the market eventually recovered and I reaped tremendous returns associated to it. This investment was one of the best I've made and as a father of 3 will help put my kids through college. Institutions use leverage all the time and I don't understand why I as a retail investor should not be given that same opportunity to compete. We are capable of doing our research and should have access to these products.
Brad Welch Comment On Regulatory Notice 22-08
I am writing to express serious concern over FINRA Regulatory Notice #22-08 and the prospect of restricting my ability to invest in these leveraged products. I am a retail investor that has done significant diligence on these products. I understand their risks, I understand the concept of volatility decay, and yet as a relatively small time investor I've been able to enjoy significant returns with these products by employing relatively simple strategies. The warnings are out there on these funds and I was concerned before diving in. I did my diligence though. I charted years of UPRO data vs. SPY, I read up on and analyzed volatility decay and some of the challenges with holding the stock longer term, and I understood the compounding nature of triple leveraged losses in a downturn. I understood all the risks but I also recognized that at the end of the day the ETF tracked the underlying S&P. Armed with my diligence, I saw the COVID crash as an opportunity to jump into UPRO. The market in my opinion was over-sold and given my time horizon (not needing to be liquid in the next 10 years off that investment), I jumped in and bought UPRO. As suspected, the market eventually recovered and I reaped tremendous returns associated to it. This investment was one of the best I've made and as a father of 3 will help put my kids through college. Institutions use leverage all the time and I don't understand why I as a retail investor should not be given that same opportunity to compete. We are capable of doing our research and should have access to these products.