Apr. 30, 2020
To whom it may concern; I am writing to comment on proposal S7-24-15, Release Nos.: 34-87607, "Use of Derivatives by Registered Investment Companies and Business Development Companies; Required Due Diligence by Broker-Dealers and Registered Investment Advisers Regarding Retail Customers’ Transactions in Certain Leveraged/Inverse Investment Vehicles" I am an individual investor and have been trading with leveraged and inverse (L/I) ETFs for approximately 10 years. Early on, my positions in these ETFs were relatively small compared to my overall portfolio, but over the years my usage of these EFTs increased significantly. Today, almost my entire portfolio is in either leveraged/inverse ETF's or in cash, at any given time. I monitor these positions daily and typically trade them on a weekly timeframe . I find that L/I ETF's are very flexible and allow me to achieve larger positions with less cash when I have strong conviction on an idea, to hedge my portfolio as necessary, and also to easily express some of my unconventional trading ideas from time to time. My portfolio performance 2020 YTD is +27%, compared to a large losses across stock market indices over the same time period. My 5 year annualized performance is also better than that of the S&P 500. For me, this kind of performance is not possible without the usage of L/I ETF's. Institutional investors have a variety of means to achieve leverage and short positions. The power of L/I ETF's is that it brings the same capability to smaller investors, such as myself. Yes, there is a learning curve to using these products, and they are not for everyone, but this is already clearly stated by my brokerage every single time I make a trade. Readily available access to these ETF's has enabled me to start small, learn how to use them over time, and achieve strong performance in my portfolio. If S7-24-15 were to be implemented, this would potentially remove the primary vehicle for how I have built my wealth, and would also block others like me from access to these benefits of these ETF's. For these reasons, I believe this proposal is unfair to individual investors and would ask the SEC to reconsider and not implement this proposal. Please do not hesitate to contact me if I can be of further assistance. Regards, Joe Palmer