Michael Thompson Comment On Regulatory Notice 22-08
Michael Thompson
N/A
I am taking this opportunity to respond to your potential limitation to using leveraged ETF's. I am a big boy and want to have the ability to use leveraged ETF's. Why is that any different than using margin with stocks. I also understand the contango component of leveraged ETF's. There was a study done by Barron's a few years ago and several leveraged ETF's were at the top of the list even for longer term which disproves the opinion by FINRA that they do not work for the longer term. FINRA is TOTALLY wrong on that assessment. Look at the track record of UYG and SSO just to name a few. These are also effective at market extremes. They can also be used to hedge a portfolio (more effective than buying put or call options). This hedge would require less upfront capital than a typical hedge. With options you can lose 100% of your money even if you are right in the direction of the move. With a leveraged ETF, you more than likely will at least have some capital left and have more time to have your bet be right. The ability to hedge is also important in proper money management. As investors we want the right to have all the tools in the tool box to use and not to be restricted by some pseudo government agency. My advisor will probably leave the business soon due to the numerous restrictions you place on Broker/Dealers and their representatives. FINRA is now taking away my ability to work with the representative that I have worked with for several years due to burdensome regulation. FINRA should not have the right to restrict how I invest and who I invest with. It is my money, not FINRA's.
Michael Thompson Comment On Regulatory Notice 22-08
I am taking this opportunity to respond to your potential limitation to using leveraged ETF's. I am a big boy and want to have the ability to use leveraged ETF's. Why is that any different than using margin with stocks. I also understand the contango component of leveraged ETF's. There was a study done by Barron's a few years ago and several leveraged ETF's were at the top of the list even for longer term which disproves the opinion by FINRA that they do not work for the longer term. FINRA is TOTALLY wrong on that assessment. Look at the track record of UYG and SSO just to name a few. These are also effective at market extremes. They can also be used to hedge a portfolio (more effective than buying put or call options). This hedge would require less upfront capital than a typical hedge. With options you can lose 100% of your money even if you are right in the direction of the move. With a leveraged ETF, you more than likely will at least have some capital left and have more time to have your bet be right. The ability to hedge is also important in proper money management. As investors we want the right to have all the tools in the tool box to use and not to be restricted by some pseudo government agency. My advisor will probably leave the business soon due to the numerous restrictions you place on Broker/Dealers and their representatives. FINRA is now taking away my ability to work with the representative that I have worked with for several years due to burdensome regulation. FINRA should not have the right to restrict how I invest and who I invest with. It is my money, not FINRA's.