March 16, 2020
My name is Dr. Nicholas Persich. I'm an individual investor with TD Ameritrade for over 10 years. I am submitting comments about the proposed rules the SEC would like to adopt concerning my ability to trade LI funds.
I am a seasoned investor with a $1.5 million portfolio. As such I have had privileges with TDA to trade options and buy equities on margin. I am fully aware of the different types of derivatives that exist in the investment world. I am fully aware that leveraged and inverse funds can be volatile. I am fully aware that leveraged funds deliver multiples of the performance of the index or benchmark they track (up or down). In the case of the Direxion Biotech Fund I own, I am aware that it is 3x leveraged (again up or down) and that those gains or losses depend on day to day movement. I invest for the long term but I am aware that day to day movements in these kinds of funds can be risky.
I am aware that inverse funds seek to deliver the opposite of the performance of the index or benchmark fund they track. I have invested in several Ultra Short funds which not only use leverage but short the investment. Again I am aware that these derivatives can be very risky. I did not obtain a $1.5 million portfolio at my age by taking excessive or undue risk.
I monitor my portfolio daily and access my account approximately 3-4 times/day. Nevertheless I am not in the habit of making daily trades on my investments unless I see the need. I am not a day trader but will exit a position when I feel it is moving against me or reaches a stop I have calculated for that investment. I let my winners run and cut my losers short.
My brokerage firm determined a decade ago that I was qualified to trade more than just individual stocks and bonds. I sought permission and was granted by TD Ameritrade the ability to trade options, trade on margin, sell and buy calendar spreads, etc etc. TDA provided me years ago with warnings concerning risky investments and determined I was experienced enough to gain Level 3 and higher trading capabilities.
I doubt any SEC regulations could have prevented the recent sell-off in stocks, bonds, commodities, leveraged and/or inverse derivatives as a result of the coronavirus PANIC. Investing has risks. Anyone investing real money in the market knows this. Personal responsibility is a must in the investment world. It is not the SEC's job to police an individual investor's decision making. The SEC cannot stop a foolish investor from being a fool.
I do not believe those that have knowledge and skill should suffer the same fate that the foolish investor will suffer. I along with all investors should be allowed to trade LI funds without interference from outside agencies. Thank you for allowing me to voice my comments.