Mar. 17, 2020
Comment on SEC Proposed Rule #S7-24-15: Leveraged funds allow me to enhance the return on my portfolio. When data tells me the Nasdaq 100 Index is the strongest relative to other broad equity indices, I would like the opportunity to have the freedom to continue making the decision to purchase TQQQ instead as an individual. On the contrary, when data tells me to play defense or if another recession rolls around, what other way besides options am I going to be able to be in a position to profit when the market falls? 1x Inverse funds offer a unique way to not only hedge portfolios when the market is overbought but also provide the opportunity to profit when the market is in a recession. Especially with the 1x Inverse, they are incredibly easier to understand than options trading. I have experience trading and holding these instruments for extended periods of time. I am aware the intricacies of the products and their composition. TQQQ offers me the ability to have 3x the daily NDX return. In a low volatile environment like 2017 that was mega. 4th quarter of 2018 offered a time to hedge the gains you made all year! In a recovery phase like the end of December 2018-2019 it was also mega to the upside. Each time, I am more than happy to check the box indicating it’s my decision and I hold no one else accountable but me. I understand how inverse funds move in the opposite direction of the normal market and that both of these types of product are not suitable for everyone or understood by everyone. However, it is their choice in a free market to take advantage of these products or not. As an individual, it has been empowering to participate to the upside using 3x leverage broad based indices like TQQQ. It’s provided me the opportunity to do things in life where traditional products would not simply due to the profit capabilities (always accompanied by loss too). I am comforted to have the ability to buy inverse products should the market begin to deteriorate. The freedom to have options to profit is what it is all about. I began my career at NASDAQ on the Global Index and Product Development team so have personal experience working closely with these types of products. I built strategies around utilizing them. I have since transitioned into being an advisor. As an advisor, we do not implement leveraged products for clients due to the current restrictions and their understanding of the products. However, it is incredible to be able to buy inverse products like (SH) for clients when the market deteriorates or is in a recession. 1x Inverse products allow me the opportunity to protect client assets and continue to appreciate them no matter what the market environment. Many clients do not have the ability to participate in option trading so these more simplistic vehicles provide them the opportunity to profit regardless of what the market is doing. How freeing is that to hear as a client? You don’t have to walk through life on egg shells wondering if a recession is around the corner and live in fear. As an advisor, companies like Proshares offer us the tools to do what’s best for our clients. I work with families who were desecrated in 08-09. Had they known products like (SH, PSQ, DOG, HDGE, RWM, EUM, SJB, TBF, etc.) were out there, what could their life look like now? These offer people the opportunity to retire when they want and have a security net with their finances to be able to cash out and live freely. Without these products our hands are tied, our toolbox is limited, our opportunity to be a fiduciary and act in our clients’ best interest is limited and diminished. By restricting these products it’s like telling me I cannot purchase a car with a V8 engine and carbon ceramic brakes because it has better power and can brake more quickly than a standard car. Isn’t that a helpful opportunity? It would be like telling the general public they cannot drink Starbucks coffee unless they get pre-approved because it has more caffeine than a normal coffee shop or what you buy in the grocery store. Like saying you need a doctor’s note to be eligible to purchase a cup of Starbucks because we don’t know how the caffeine levels will effect each individual. It’d be taking away business opportunity from a corporation just like restricting these products takes profit opportunity away from people. The existence of these products is not the problem. Like most things, it is the education behind it. I am happy to speak with or meet with anyone to discuss this. Bring on the disclosures if that’s what it takes to continue allowing these brilliant products to exist, but please do not strip us of this freedom to profit in this great country. We are roughly 4.5% of the world population but control roughly 25% of the world’s wealth. Let the land of opportunity continue to be so! Regards, Thomas Doyle