Gregory Valdovinos Comment On Regulatory Notice 22-08
Gregory Valdovinos
N/A
I believe that inverse funds are necessary to effectively manage my portfolio. As an individual investor it can be very challenging to hedge against market volatility and large draw-downs in the market. Inside retirement accounts, I have very few tools to hedge my portfolio, shorting and options are generally not allowed. That leaves buying of inverse ETFs as one of the few options to provide some hedging protection for my long positions. Outside of my retirement accounts, I can buy puts or short a stock, but that is a very risky proposition because single stocks can have outrageous short squeezes like Gamestop. Buying an inverse ETF allows me to avoid having my shares called-away at the worst possible time and there are no short-dividends to pay. Additionally, an inverse ETF is much less risky than buying put options. Most put options expire worthless which is much worse than a little time decay in the inverse ETF. I appreciate that FINRA/SEC is trying to protect small investors but as a small investor that will rely upon my investments for retirement, I dont need protection from myself, I need protection from companies that distort their earnings, as well as market participants that spoof, front run and employ other market manipulation tactics. I wouldnt want to drive a car without car insurance or go to a hospital without medical insurance. I dont want to own stocks in a portfolio without having some way to insure or hedge against large systemic market moves. Please do not put roadblocks or requirements in the way of purchasing inverse ETFs. It remains one of the few tools that individual investors like me can utilize to manage my risk. I should decide what my investment choices are, not a third party.
Gregory Valdovinos Comment On Regulatory Notice 22-08
I believe that inverse funds are necessary to effectively manage my portfolio. As an individual investor it can be very challenging to hedge against market volatility and large draw-downs in the market. Inside retirement accounts, I have very few tools to hedge my portfolio, shorting and options are generally not allowed. That leaves buying of inverse ETFs as one of the few options to provide some hedging protection for my long positions. Outside of my retirement accounts, I can buy puts or short a stock, but that is a very risky proposition because single stocks can have outrageous short squeezes like Gamestop. Buying an inverse ETF allows me to avoid having my shares called-away at the worst possible time and there are no short-dividends to pay. Additionally, an inverse ETF is much less risky than buying put options. Most put options expire worthless which is much worse than a little time decay in the inverse ETF. I appreciate that FINRA/SEC is trying to protect small investors but as a small investor that will rely upon my investments for retirement, I dont need protection from myself, I need protection from companies that distort their earnings, as well as market participants that spoof, front run and employ other market manipulation tactics. I wouldnt want to drive a car without car insurance or go to a hospital without medical insurance. I dont want to own stocks in a portfolio without having some way to insure or hedge against large systemic market moves. Please do not put roadblocks or requirements in the way of purchasing inverse ETFs. It remains one of the few tools that individual investors like me can utilize to manage my risk. I should decide what my investment choices are, not a third party.