Im a non-professional investor with a liquid net worth of over $3 million. I have been successfully using leveraged funds for more than 10 years as part of a complex investment strategy. I use them to hedge my investments as well as take aggressive positions in the market when the environment is suitable. These leveraged ETFs give me flexibility and market penetration that would otherwise be very difficult, if not impossible. For example, I can risk far less amount in a long position because of their leveraged nature. In fact, I usually have 50-75% of my portfolio in cash, since I dont have to risk as much for the same growth potential. Ironically, without leveraged ETFs, I would probably have to take bigger risks in the market with less cash on-hand, and in the event of a down turn, I would potentially not have enough cash to bail myself out.
To have additional regulation hinder my ability to use levered tools would be devastating to my long term investment strategy. Its taken me more than a decade to hone my skills in these tools, and I dont know what I would do without them.
There is inherent risk in all aspects of trading. Leveraged ETFs are not any riskier than naked options, short selling, and cryptocurrency trading. Its up to each individual investor to learn how to use them, but to punish those of us who have taken the time to learn how to sensibly use these products is absolutely unconscionable.
Frank Mahzari Comment On Regulatory Notice 22-08
Im a non-professional investor with a liquid net worth of over $3 million. I have been successfully using leveraged funds for more than 10 years as part of a complex investment strategy. I use them to hedge my investments as well as take aggressive positions in the market when the environment is suitable. These leveraged ETFs give me flexibility and market penetration that would otherwise be very difficult, if not impossible. For example, I can risk far less amount in a long position because of their leveraged nature. In fact, I usually have 50-75% of my portfolio in cash, since I dont have to risk as much for the same growth potential. Ironically, without leveraged ETFs, I would probably have to take bigger risks in the market with less cash on-hand, and in the event of a down turn, I would potentially not have enough cash to bail myself out.
To have additional regulation hinder my ability to use levered tools would be devastating to my long term investment strategy. Its taken me more than a decade to hone my skills in these tools, and I dont know what I would do without them.
There is inherent risk in all aspects of trading. Leveraged ETFs are not any riskier than naked options, short selling, and cryptocurrency trading. Its up to each individual investor to learn how to use them, but to punish those of us who have taken the time to learn how to sensibly use these products is absolutely unconscionable.