I would like to weigh-in on the regulations being considered by the Financial Industry Regulatory Authority (FINRA), to limit the availability of individual investors investing in leveraged and inverse funds, and other like investments without strict testing and special approvals by their broker.
Its my opinion that some brokers, who are part of FINRA are the reason that people like me seek other means of investing and have driven the motivation of people like me to learn of investment strategies that can be used to regain major setbacks experienced because of their trust in licensed brokers. Mine in fact, called himself a Certified Financial Educator.
My broker pushed Alternative Investments and has in essence hijacked my retirement into VERY LOW PERFORMING investments However, not low performing for him (i.e., fees and non-liquidity), but for me the investor.
I would ask that you place your focus on regulating the licensed brokers that deceive the public for financial gain; although they claim to be fiduciary often practice boarder-line practices of getting around that responsibility. I say this from a personal (not so good) experience of the Broker tying me up in Alternative Investments, that are EXTREMELY hard to get out of and have thereby severely worsened my financial future, in a time that much better investments were available. I suspect your thoughts are leaning toward - no one can predict the future, and thats true. But allowing a client to complete the form to say they have investing for 10-years when all they have done is contributed to an employer 401k is deplorable. Because what unsuspecting investors who TRUST their advisor learns that by saying they have invested for 10-years, they opened the door to be offered any product of the brokers choice. And in a market that was setting record highs, the broker rationalizes they are looking for opportunities this makes no sense.
I personally lost more money, and more importantly investment time-frame (2010-2016) by placing my trust in a Broker who, in my opinion, made more money on my retirement potential than I did. So since then, my mindset has become one of educating myself to take on the risk to secure own my financial future.
Leveraged and Inverse funds, of course, should be used with extreme caution. But here is my take, and I will use leverages funds for my example.
Take the S&P 500 for a well versified investment, as a matter of fact, a benchmark in the industry. I invest in the S&P 500 as my stronghold long-term investment strategy, but when the market experiences a significant drop of 20+%, I move money into the leveraged S&P funds and wait in anticipation for the ride back up. History has proven over and over again, that the market typically comes back to market highs within 17 months, give or take. I believe limiting the leveraged or inverse investments to a small portion of my portfolio which allows me the opportunity to boost my market gains without risking the entire portfolio.
Im not a guru in the industry, but as a citizen of a free nation, I dont need someone (especially someone who is gaining financially from their advice) to impose restrictions on what I can and cannot invest in. I believe I am capable of weighing out the risks of investing my own hard- earned money. I dont need anyone deciding that for me, I understand the risks. Oh, and by the way, since I regained control of my own investments from my broker I have nearly doubled my net worth where the time with my broker remained STAGNANT.
There are already important industry safeguards in place, restricting frequent trading of these types of investment, for example, a cooling off period where re-investments are already restricted. Also, please note, investors like me, do not go into these investments lightly, not without being educated through reading certain materials to ascertain knowledge of the risk. There is no need for regulators, or brokers to impose additional measures, impose special tests, or be tested on high net worth. Please, let individual investors decide for themselves.
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M Pike Comment On Regulatory Notice 22-08
I would like to weigh-in on the regulations being considered by the Financial Industry Regulatory Authority (FINRA), to limit the availability of individual investors investing in leveraged and inverse funds, and other like investments without strict testing and special approvals by their broker.
Its my opinion that some brokers, who are part of FINRA are the reason that people like me seek other means of investing and have driven the motivation of people like me to learn of investment strategies that can be used to regain major setbacks experienced because of their trust in licensed brokers. Mine in fact, called himself a Certified Financial Educator.
My broker pushed Alternative Investments and has in essence hijacked my retirement into VERY LOW PERFORMING investments However, not low performing for him (i.e., fees and non-liquidity), but for me the investor.
I would ask that you place your focus on regulating the licensed brokers that deceive the public for financial gain; although they claim to be fiduciary often practice boarder-line practices of getting around that responsibility. I say this from a personal (not so good) experience of the Broker tying me up in Alternative Investments, that are EXTREMELY hard to get out of and have thereby severely worsened my financial future, in a time that much better investments were available. I suspect your thoughts are leaning toward - no one can predict the future, and thats true. But allowing a client to complete the form to say they have investing for 10-years when all they have done is contributed to an employer 401k is deplorable. Because what unsuspecting investors who TRUST their advisor learns that by saying they have invested for 10-years, they opened the door to be offered any product of the brokers choice. And in a market that was setting record highs, the broker rationalizes they are looking for opportunities this makes no sense.
I personally lost more money, and more importantly investment time-frame (2010-2016) by placing my trust in a Broker who, in my opinion, made more money on my retirement potential than I did. So since then, my mindset has become one of educating myself to take on the risk to secure own my financial future.
Leveraged and Inverse funds, of course, should be used with extreme caution. But here is my take, and I will use leverages funds for my example.
Take the S&P 500 for a well versified investment, as a matter of fact, a benchmark in the industry. I invest in the S&P 500 as my stronghold long-term investment strategy, but when the market experiences a significant drop of 20+%, I move money into the leveraged S&P funds and wait in anticipation for the ride back up. History has proven over and over again, that the market typically comes back to market highs within 17 months, give or take. I believe limiting the leveraged or inverse investments to a small portion of my portfolio which allows me the opportunity to boost my market gains without risking the entire portfolio.
Im not a guru in the industry, but as a citizen of a free nation, I dont need someone (especially someone who is gaining financially from their advice) to impose restrictions on what I can and cannot invest in. I believe I am capable of weighing out the risks of investing my own hard- earned money. I dont need anyone deciding that for me, I understand the risks. Oh, and by the way, since I regained control of my own investments from my broker I have nearly doubled my net worth where the time with my broker remained STAGNANT.
There are already important industry safeguards in place, restricting frequent trading of these types of investment, for example, a cooling off period where re-investments are already restricted. Also, please note, investors like me, do not go into these investments lightly, not without being educated through reading certain materials to ascertain knowledge of the risk. There is no need for regulators, or brokers to impose additional measures, impose special tests, or be tested on high net worth. Please, let individual investors decide for themselves.