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Dror Baron Comment On Regulatory Notice 22-08

Dror Baron
N/A

Comments: I find the recent discussions about leveraged funds silly. It's been discussed in detail on various online forums how leveraged funds are good for short term trading, and are also fine for long term investment *provided* the investor is sufficiently informed about the rules. See, for example, the famous "hedgefundie adventure." Yes, there is volatility drag, but the examples cited online involve contrived scenarios where the market goes up and down 5-10% per day, many days in a row. How often does this happen? In the real world, the volatility drag is a few percent a year.
Frankly, if an investor is so uneducated that he or she can't perform simple calculations, then they shouldn't be investing at all.