I was made aware that FINRA is seeking to put restrictions on L&I investments to "protect" investors. I'd like to offer up my experience as an example of why this is not needed. Details are below but I'd like to emphasize first:
I can make my own decisions about investments and do my own research. I don't need to prove to anyone that I can handle it, because I know how to accept risk.
I don't risk more than I'm willing to lose.
I don't need any special screening process or restrictions or tests to gain access to these instruments. I know when to use them and when not to. These are public securities and should remain easily accessible.
L&I funds are a very important part of my investment strategy for a portion of my portfolio in which I seek out enhanced short term returns. Please don't ruin my portfolio and strategies.
I started using leveraged and inverse ETFs in 2010. I found out about these on my own when I was curious as to whether there was an index fund that could get me bigger short term gains and higher volatility on a very short term basis. I found L&I ETFs and read all about them, and figured out how to use them and when they could get confusing. The point is that I FIGURED IT OUT, easily, without a regulating agency trying to "protect me", and I have been successful with these for over a decade.
The process of using the readily available educational resources already offered by the Funds and by Brokers opened up a whole new world for me and has brought me much success.
All the information necessary to be successful with these funds is READILY AVAILABLE. An individual who opens a brokerage account SHOULD be using these resources to educate themselves. If they don't then they deserve the uncomfortable surprises.
On the other hand, I would agree that any brokerage who is RECOMMENDING these tools to individuals might have to jump through some hoops. Like a surgeon recommending a procedure, the recipient must be fully informed of risks and what some other alternatives could be, and the patient must be shown to be fit for that surgery.
But to penalize individual smart investors who seek out their own strategies and success - absolutely not. Make the resources freely available like they are now and always have been and allow people to educate themselves.
Steve Oliveau Comment On Regulatory Notice 22-08
I was made aware that FINRA is seeking to put restrictions on L&I investments to "protect" investors. I'd like to offer up my experience as an example of why this is not needed. Details are below but I'd like to emphasize first:
I can make my own decisions about investments and do my own research. I don't need to prove to anyone that I can handle it, because I know how to accept risk.
I don't risk more than I'm willing to lose.
I don't need any special screening process or restrictions or tests to gain access to these instruments. I know when to use them and when not to. These are public securities and should remain easily accessible.
L&I funds are a very important part of my investment strategy for a portion of my portfolio in which I seek out enhanced short term returns. Please don't ruin my portfolio and strategies.
I started using leveraged and inverse ETFs in 2010. I found out about these on my own when I was curious as to whether there was an index fund that could get me bigger short term gains and higher volatility on a very short term basis. I found L&I ETFs and read all about them, and figured out how to use them and when they could get confusing. The point is that I FIGURED IT OUT, easily, without a regulating agency trying to "protect me", and I have been successful with these for over a decade.
The process of using the readily available educational resources already offered by the Funds and by Brokers opened up a whole new world for me and has brought me much success.
All the information necessary to be successful with these funds is READILY AVAILABLE. An individual who opens a brokerage account SHOULD be using these resources to educate themselves. If they don't then they deserve the uncomfortable surprises.
On the other hand, I would agree that any brokerage who is RECOMMENDING these tools to individuals might have to jump through some hoops. Like a surgeon recommending a procedure, the recipient must be fully informed of risks and what some other alternatives could be, and the patient must be shown to be fit for that surgery.
But to penalize individual smart investors who seek out their own strategies and success - absolutely not. Make the resources freely available like they are now and always have been and allow people to educate themselves.