I have heard that FINRA is seeking to put restrictions on investors, particularly individual investors, from buying into inverse funds or leveraged funds. I am an individual investor and having been using leveraged and inverse funds for more than 10 years. I am quite capable of doing my own research and understanding the risks. In the current market environment using these types of funds is a good alternative for small investors. Hedge funds and large investment companies have access to many different vehicles for hedging their portfolios but individual investors have few options. Shorting stocks requires a lot of capital and is very risky for a small investor. Having the ability to buy into a leveraged fund or an inverse fund allows individual investors to hedge their portfolio using a reasonable amount of capital and a known potential loss . If FINRA enacts these restrictions, it will be another rule that punishes the small investors and gives further advantage to the large companies.
David Simpson Comment On Regulatory Notice 22-08
I have heard that FINRA is seeking to put restrictions on investors, particularly individual investors, from buying into inverse funds or leveraged funds. I am an individual investor and having been using leveraged and inverse funds for more than 10 years. I am quite capable of doing my own research and understanding the risks. In the current market environment using these types of funds is a good alternative for small investors. Hedge funds and large investment companies have access to many different vehicles for hedging their portfolios but individual investors have few options. Shorting stocks requires a lot of capital and is very risky for a small investor. Having the ability to buy into a leveraged fund or an inverse fund allows individual investors to hedge their portfolio using a reasonable amount of capital and a known potential loss . If FINRA enacts these restrictions, it will be another rule that punishes the small investors and gives further advantage to the large companies.