Mar. 17, 2020
Comment on SEC Proposed Rule #S7-24-15: Dear Sir or Madam, I am writing this letter to express my support for the continuation of the leveraged funds option for investors. I feel strongly that this option needs to be kept open for investors for two main reasons. First of all, the leveraged funds offer an excellent opportunity to spread risk throughout a portfolio with a significantly smaller cash outlay. For instance, if an investor wants to maintain his/her position in the stock market but he/she is concerned about risk factors, it is possible to take a smaller cash position in a leveraged fund for protection. The precious metals are an obvious example of a risk-modifying asset class that still allows general stock market participation to a fuller extent. Secondly, the leveraged fund can provide a "catch-up trade" for various applications or reasons. For those investors starting late and desiring the opportunity to achieve greater results, once the factor of "time over timing" has been eliminated, the leveraged trade can be a literal life-saver. In other words, many do not understand the importance of how early to start in the investing area for retirement or long-term savings reasons. Others are coming from difficult personal situations, such as a financially crippling divorce, and lack the time to do "long-term" investing with meaningful enough results. Having at least some of their portfolio in leveraged funds can allow them to "catch-up" for lost years. It is entirely appropriate to warn investors of the risks of such investments, and have them sign an agreement that they understand those risks. For skilled investors, and for those wishing to spread risk and "catch-up" for any number of reasons, the freedom to invest however they so choose would seem a right that any investor should have. If we are prepared for the risks we should be allowed to take those risks from a purely personal freedom perspective. Finally, changing these rules without a reasonalbe amont of lead time, say 9-12 months, could put someone in the position of insufficient time to wait out a position that is under water. By removing the leveraged aspect, while first allowing it, you are taking away the freedom of the investor to hold it to recoup lost returns that can most easily be made up in leveraged positions. Thank you for your consideration, Steve Rosenfeld 103 Greenridge Dr. Manlius, NY 13104 (315) 271-7776 Regards, Steven Rosenfeld