The free availability of leveraged and inverse Exchange Traded Fund (ETF) shares are an absolute benefit to average, individual, small-time investors such as myself. The available prospectus of each fund clearly describes the risks and tells us the proper cautions.
Please note that hedging and leverage opportunities were available to us before these ETF's existed. However, small investors had to use margin, go short, or trade options to get these benefits. Every one of these approaches is more complicated, more expensive, and more risky than the straight-forward approach that is now available to small, individual investors thanks to these ETFs.
I am adamantly opposed to any new, or enhanced, restrictions on the trading of leveraged and inverse Exchange Traded Funds.
First, the mere issuance of the restrictions will eliminate potential buyers, which will cause great losses for the very investors that are supposedly to be protected by new rules.
Second, ETF's are very straight forward investments. They are easy to understand and employ to respond to changing economic conditions. There is simply no reason why our ability to hedge, or aggressively invest small portions of our overall portfolio should be returned to the old days of only getting those benefits from margin, shorting, or complex option trades.
Please leave the situation as it presently exists. All that will be accomplished by restricting access to leveraged and inverse ETFs will be to cause individual investors to lose benefits, lose potential buyers of our shares, and increase our costs.
Joel Stout Comment On Regulatory Notice 22-08
The free availability of leveraged and inverse Exchange Traded Fund (ETF) shares are an absolute benefit to average, individual, small-time investors such as myself. The available prospectus of each fund clearly describes the risks and tells us the proper cautions.
Please note that hedging and leverage opportunities were available to us before these ETF's existed. However, small investors had to use margin, go short, or trade options to get these benefits. Every one of these approaches is more complicated, more expensive, and more risky than the straight-forward approach that is now available to small, individual investors thanks to these ETFs.
I am adamantly opposed to any new, or enhanced, restrictions on the trading of leveraged and inverse Exchange Traded Funds.
First, the mere issuance of the restrictions will eliminate potential buyers, which will cause great losses for the very investors that are supposedly to be protected by new rules.
Second, ETF's are very straight forward investments. They are easy to understand and employ to respond to changing economic conditions. There is simply no reason why our ability to hedge, or aggressively invest small portions of our overall portfolio should be returned to the old days of only getting those benefits from margin, shorting, or complex option trades.
Please leave the situation as it presently exists. All that will be accomplished by restricting access to leveraged and inverse ETFs will be to cause individual investors to lose benefits, lose potential buyers of our shares, and increase our costs.