Subject: N/A
From: Robert Macdonald

Mar. 25, 2020


Comment on SEC Proposed Rule #S7-24-15: 

This is my response as of 3/24/20 to the 2020 Security and Exchange Commission Release No.34-87607 
I am humble requesting that the SEC does not adopt their proposed regulations for the reasons I’ll outline and list below. 
PERSONAL BACKGROUND I am presently retired. My investment experience has been employed in the Securities industry from 1992 till retiring in 2009. With such national firms such as A.G.Edwards, Janney Montgomery Scott, and LPL. I had a series 7 license to introduce many investment products such as but not limited to: Stocks, Bonds, ETF’s, Mutual Funds (open and closed), Annuities and Life insurance. To name the majority I concentrated on. 
During that period, I explained in detail the risks involved with all product, making sure the products were suitable for the client per their suitability and comfort and goals they outlined during the opening of the account. And when I would make an offer of any product, I would remind them of the risks involved with the product. 
Over the many years since leaving the industry, I have been buying and selling the Leveraged and Inverse funds in my personal account. I have cleared all my trades thru Charles Schwab. 
SCHWABB COMMUNICATION: Once a year they send me a warning in the risks involved with such products. I think that is a good idea as a reminder what can happen to the investment – they can go up or they go down, like all investments. Once a year is enough! I got it. My job is to monitor and act. I do not think they should have the right to decide if I am suitable for such products. That’s like the Government in New York City, Mayor Bloomberg said I can’t drink 32 oz soda….well I’ll buy 2 16 oz sodas. That is not his business of telling me what to eat drink, do or buy. My choice/My Responsibility to succeed or fail. 
In my personal perspective, the responsibility strongly lays in the lap of the individual or professional investor who is buying such products. They must do the research and “due Diligence” into the risks and rewards of owning such products. 
If they don’t know what the risks are and the investment become a loss, it is not the product’s fault, or the clearing house, it’s the owner’s fault for not researching and monitoring the potential outcomes that MIGHT occur. I take on that responsibility. 
Not establishing and enforcing a selling strategy is the problem with investors, including myself. (it’s not the product nor the Schwab fault). If an investor has been using the product for over a year or longer such as myself, I should be green-lighted to continue using them. 
SELLING STRATEGY and INVERSE ETF’s Throughout the many years I have made many mistakes with such products The ETF’s mirror an industry and if the industry goes up or down, so does the ETF. That is an inherit trait of the product. The product did what it was built for, that is why the client bought it, to represent a sector of the investing world. If the client does not have a strategy for selling, it not the fault of the ETF, but the clients. The emphasis should be on mastering the SELLING STRATEGY! 
I’ll be honest, I have lost money owning the ETFs And I have made it too. Same with stocks and open-ended Mutual funds. Look at the recent market correction in March. No matter what you owned; it went down. EXCEPT THE INVERSE FUNDS: symbol DRIP $50 to $700 ( I wish I bought it; I was paralyzed like a deer in head light. Not the products fault. Look at the most successful mutual fund, LEGG MASON VALUE TRUST symbol (LMVTX) has gone from 87 to 52, down 40% and that is more than the S&P 500 down by over 30%. Nothing is immune from a sell off, except the INVERSE ETFs. Last year that fund, LMVTX was up 100%, no complaints there? 
A PROBLEM WITH OPEN END MUTUAL FUNDS There has always been a false sense of security that the manager of such funds like a Bill Miller mentioned above,(not picking on him but it is inherited in the product, the investor thinks and relies the fund will “BUY LOW AND SELL HIGH and go to safety on money market or bonds. But did they recently? Resounding NO! They rode the investment down like the Titanic. That story of the investment products is (in my opinion) not strongly highlighted. I have observed that the money manager MUST STAY INVESTED ALL THE TIME AND STAY WITH IT ALL THE WAY DOWN. I personally have been burned too many times because of the false and assumed security that they will protect my investments in the portfolio. But the reality, they did not 
CNBC and INVERSE ETFs Since the proliferation of online trading, (I do too through Schwab), the CNBC and investment shows strongly recommend buy and hold for the long term (dangerous for the elderly). Rarely if ever do they emphasize to have a selling strategy and discuss that method. . How did the buy and hold strategy work in this sell off? Everything went down except the inverse funds. Not the product’s fault since the ETF’s are a bundle of investments that mirror a sector of the market. The investor sees the ads on TV and elsewhere that they are a static basket, not managing the in and out flow like and open mutual fund being managed by an investment team. 
MONITORING ACCOUNTI It is the responsibility for the individual investor to take the responsibility to MONITOR ALL THEIR investments, who better to do that than that investor. Its their money and interest. I do daily. I have gone the extra mile and subscribe to Refinitiv who were the data feed from my days when working in the brokerage house mentioned above. It’s not heir fault or the products fault or Schwab fault, I did not establish a buying, holding, or mostly a selling criteria. I have spent many hours perfecting those criteria. If you would like to see it, just ask and I’ll immediately forward. 
MARGIN ACCOUNTS & COMPUTER TRADING The problem is not with the L&I funds but with the Professional hedge funds who margin excessively their portfolios and products that when they go bust the whole world gets hurt. The excessive margins are the problem. Now they go back to the Federal reserve to bail them out like 2008 . Concentrate on controlling them not the L&I ETFs 
** BIG PROBLEM – LACK OF INDIVIDUAL INVESTOR EDUCATION ESPECIALLY IN USEFUL AND INSIGHTFUL TECHNICAL ANNALYSIS. The investing community talk fundamental analysis, that only an egg head would understand, Technical analysis is the most insightful tool available for all investors, show the bullish or bearish future trend of all investing products. Of course, it too has it many industry complications. This last year, I intently studed what T/A work the best and throwing out what does not. Contact me Robert Macdonald 410-463-0031 
DIREXION AND ETF COMMUNITY In my many years of observing and using their products, I have found that they bend over backward to warn the individual of every possible problem with their products. And I’m sure it is because the SEC requires them to do so. The problem there is an information overload which turns individuals from reading the important stuff. SEC SUGGESTION: Offer an insightful summary of no more than 3 pages. 

I sincerely thank you for reviewing my comments. Please don't hesitate to contact me with your questions. Its ok to call 4104630031 
Sincerely Robert Macdonald