Comments on: Will the ETF be Viewed as Another Financial Innovation Disaster? http://www.darwinsfinance.com/financial-innovation-etf/ Financial Evolution: Education, Adaptation, Achievement Mon, 06 Feb 2012 15:43:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chrisfshttp://www.darwinsfinance.com/financial-innovation-etf/#comment-5081 Chrisfs Tue, 30 Mar 2010 16:03:53 +0000 http://www.darwinsfinance.com/?p=1476#comment-5081 The 'daily reset' feature of leveraged ETF needs to be clearly explained to everyone that buys them. There should be a one page brochure or something(even those get tossed away). The idea of "it follows an index only 2x or 3x" is inadequate. Saying 'Hey you should have known what you were buying before you bought it', after lots of people have lost money on them will score points with some people, but doom leveraged ETFs to 'bad investment' status. You have to do it before hand. Sadly for the industry, being effective at this will mean that some people won't buy the product. It's hard to self regulate when there's a yacht payment at risk. Having said that, it's not likely to be as big a problem. The problem with credit default swaps and no-doc loans,neg am loans, was the immense size of problem. This took down numerous companies and banks. I don't see ETF doing the same scale of damage. The ‘daily reset’ feature of leveraged ETF needs to be clearly explained to everyone that buys them. There should be a one page brochure or something(even those get tossed away). The idea of “it follows an index only 2x or 3x” is inadequate. Saying ‘Hey you should have known what you were buying before you bought it’, after lots of people have lost money on them will score points with some people, but doom leveraged ETFs to ‘bad investment’ status. You have to do it before hand. Sadly for the industry, being effective at this will mean that some people won’t buy the product. It’s hard to self regulate when there’s a yacht payment at risk.

Having said that, it’s not likely to be as big a problem. The problem with credit default swaps and no-doc loans,neg am loans, was the immense size of problem. This took down numerous companies and banks. I don’t see ETF doing the same scale of damage.

]]> By: Weekend reading: Blog battle of the sexeshttp://www.darwinsfinance.com/financial-innovation-etf/#comment-3506 Weekend reading: Blog battle of the sexes Sat, 19 Dec 2009 13:04:07 +0000 http://www.darwinsfinance.com/?p=1476#comment-3506 [...] Will ETFs be viewed one day as a disaster? – Darwin’s Finance [...] [...] Will ETFs be viewed one day as a disaster? – Darwin’s Finance [...]

]]> By: Anonymous Cowardhttp://www.darwinsfinance.com/financial-innovation-etf/#comment-3404 Anonymous Coward Wed, 09 Dec 2009 20:36:55 +0000 http://www.darwinsfinance.com/?p=1476#comment-3404 baby enron? baby enron?

]]> By: Mark Wolfingerhttp://www.darwinsfinance.com/financial-innovation-etf/#comment-3400 Mark Wolfinger Wed, 09 Dec 2009 17:07:33 +0000 http://www.darwinsfinance.com/?p=1476#comment-3400 The ETF is a fine instrument. But, a few greedy and unscrupulous firms that manage ETFs have ruined the game for everyone. These leveraged ETFs should never have been allowed to exist. By simply buying 200 or 300 shares of the 'regular' ETF, and not saving a few commission pennies, the investor avoid the leveraged ETF nightmare. But who is going to tell that to investors? This is a situation in which anyone and everyone who can devise a produce to sell is in the game. Caveat Emptor is reality, when the SEC should be protecting investors from this garbage. The ETF is a fine instrument.

But, a few greedy and unscrupulous firms that manage ETFs have ruined the game for everyone. These leveraged ETFs should never have been allowed to exist.

By simply buying 200 or 300 shares of the ‘regular’ ETF, and not saving a few commission pennies, the investor avoid the leveraged ETF nightmare. But who is going to tell that to investors?

This is a situation in which anyone and everyone who can devise a produce to sell is in the game. Caveat Emptor is reality, when the SEC should be protecting investors from this garbage.

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