Guilherme Gobbo Comment On Regulatory Notice 22-08
Guilherme Gobbo
N/A
Dear Regulator,
I first learned about leveraged ETFs in 2007, just before the great financial crisis and I have used them as part of my portfolio to achieve my investment goals ever since.
I had a position in them just before the great financial crisis, and remember well how quickly they lost value, but having grown up in a hyper-inflationary environment, I also had clear understanding of the impact of compound interest rates on the way up, which benefited me significantly as we exited the great financial crisis.
As part of my decision making process, I learned that inverse leveraged funds can be used for short periods of time, and in very specific situations. I used this option when we were hit by the covid pandemic, in March and April 2020 to hedge a long position and avoid having to sell at the bottom.
I also learned that certain leveraged funds can be held for long periods of time as a way to enhance exposure, without the inherent risks of buying securities on margin and having a margin call or having to track the expiration dates of call options.
Most importantly, I had the option to decide on how and when to invest in a security that better suited me in my investment goals, and I would strongly oppose the idea that someone should be able to tell me how to invest my own money, or limit my ability to access investment options just because I am a small investor.
Leveraged ETFs of broad indices, either 2X or 3X, should not be subject to any process, test, or minimum capital, and should be open to all investors, as they can play a very important role in long term investment goals. And it should be up to each individual investor to decide whether those securities are suitable to them.
Inverse ETFs have a much narrower application, but they can be useful in certain situations and very short periods, as they did for me in 2020.
I summary, I was totally surprised to learn that regulators wanted to limit my ability to access investment options that served me so well for almost 15 years, and I strongly hope that my right to decide will be preserved, otherwise it will represent a complete disappointment and an irreparable loss to my portfolio.
Guilherme Gobbo Comment On Regulatory Notice 22-08
Dear Regulator,
I first learned about leveraged ETFs in 2007, just before the great financial crisis and I have used them as part of my portfolio to achieve my investment goals ever since.
I had a position in them just before the great financial crisis, and remember well how quickly they lost value, but having grown up in a hyper-inflationary environment, I also had clear understanding of the impact of compound interest rates on the way up, which benefited me significantly as we exited the great financial crisis.
As part of my decision making process, I learned that inverse leveraged funds can be used for short periods of time, and in very specific situations. I used this option when we were hit by the covid pandemic, in March and April 2020 to hedge a long position and avoid having to sell at the bottom.
I also learned that certain leveraged funds can be held for long periods of time as a way to enhance exposure, without the inherent risks of buying securities on margin and having a margin call or having to track the expiration dates of call options.
Most importantly, I had the option to decide on how and when to invest in a security that better suited me in my investment goals, and I would strongly oppose the idea that someone should be able to tell me how to invest my own money, or limit my ability to access investment options just because I am a small investor.
Leveraged ETFs of broad indices, either 2X or 3X, should not be subject to any process, test, or minimum capital, and should be open to all investors, as they can play a very important role in long term investment goals. And it should be up to each individual investor to decide whether those securities are suitable to them.
Inverse ETFs have a much narrower application, but they can be useful in certain situations and very short periods, as they did for me in 2020.
I summary, I was totally surprised to learn that regulators wanted to limit my ability to access investment options that served me so well for almost 15 years, and I strongly hope that my right to decide will be preserved, otherwise it will represent a complete disappointment and an irreparable loss to my portfolio.