Michael Garbers Comment On Regulatory Notice 22-08
Michael Garbers
N/A
I do not support restrictions on peoples freedom to invest. While perhaps the intentions are good it is a slippery slope to start restricting trading on certain investments, such as leveraged and inverse trading vehicles. While these funds may indeed have higher risk, so do many individual stocks. Not all companies and their corresponding stocks are equal, people make investment choices all the time to invest in companies that provide a higher risk/higher reward scenario. Many of these investments in companies are risky but it is not practical or ideal to limit investors from making their own choices. Somebody investing all their money into one stock also involves great risk but that is a reality of a publicly traded stock market. In my opinion it is not appropriate to tell a person they cannot make the choice they feel is best with respect to their investments, they should be allowed to pursue the path they feel is best.
When trading in these types of funds, my brokerage always provides a notification regarding the added risks of these types of trades. This seems like an appropriate reminder to investors. I do not think it needs to go beyond this. Educating people about investing is extremely important and should probably be the greater focus. I do not feel, however, that retail investors should be required to pass an exam or measures such as that in order to trade the way they ultimately feel is best.
There are also serious questions and concerns around how such restrictions would be implemented. If more high wealth individuals and hedge fund managers, for example, have greater access to these trading vehicles it would just add to the perception that those people have advantages when investing over retail investors. Public investments should be available to the public on as equitable a basis as practical and not restricted from the more retail investment community.
For me I use these investment vehicles on a limited basis to reduce my risks in the market (inverse funds to smooth out some of my long exposure) and leveraged funds to take advantage of short-term market volatility. I have been trading in these on a limited basis for years and they are an integral part of my investment approach.
I hope you make the right decision and do not restrict access to the publicly traded markets from retail investors. Again, this would only add to the perception of certain privileged individuals having greater access than the general public to investment opportunities.
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Michael Garbers Comment On Regulatory Notice 22-08
I do not support restrictions on peoples freedom to invest. While perhaps the intentions are good it is a slippery slope to start restricting trading on certain investments, such as leveraged and inverse trading vehicles. While these funds may indeed have higher risk, so do many individual stocks. Not all companies and their corresponding stocks are equal, people make investment choices all the time to invest in companies that provide a higher risk/higher reward scenario. Many of these investments in companies are risky but it is not practical or ideal to limit investors from making their own choices. Somebody investing all their money into one stock also involves great risk but that is a reality of a publicly traded stock market. In my opinion it is not appropriate to tell a person they cannot make the choice they feel is best with respect to their investments, they should be allowed to pursue the path they feel is best.
When trading in these types of funds, my brokerage always provides a notification regarding the added risks of these types of trades. This seems like an appropriate reminder to investors. I do not think it needs to go beyond this. Educating people about investing is extremely important and should probably be the greater focus. I do not feel, however, that retail investors should be required to pass an exam or measures such as that in order to trade the way they ultimately feel is best.
There are also serious questions and concerns around how such restrictions would be implemented. If more high wealth individuals and hedge fund managers, for example, have greater access to these trading vehicles it would just add to the perception that those people have advantages when investing over retail investors. Public investments should be available to the public on as equitable a basis as practical and not restricted from the more retail investment community.
For me I use these investment vehicles on a limited basis to reduce my risks in the market (inverse funds to smooth out some of my long exposure) and leveraged funds to take advantage of short-term market volatility. I have been trading in these on a limited basis for years and they are an integral part of my investment approach.
I hope you make the right decision and do not restrict access to the publicly traded markets from retail investors. Again, this would only add to the perception of certain privileged individuals having greater access than the general public to investment opportunities.