This week, Attain’s publications ask a seemingly simple question: why alternatives? It seems easy enough; just two words, five syllables. The problem is that the answer to this question cannot be understood in a short time-span, and even after years of market research, collaboration, and conversation, there is one question we struggle with even more: why not alternatives?
We work with institutional investors, funds of funds, and RIAs, at no additional cost to them, to help meet their portfolio diversification needs through managed futures. We like to think we’ve got a pretty good system in place. Managed futures isn’t going to be right for everyone, but what is truly befuddling to us is the number of qualified, well-suited investors who have dismissed the asset class altogether â€“ or worse â€“ settled for an “alternative” where the only alternative thing about the investment is the way the marketing describes it.
We get it, to some extent. The word “alternative” is often associated with terms like “risky” or “dangerous,” which isn’t exactly what you want to hear when you’re looking for a long-term investment strategy. While we won’t tell you there’s no risk in alternatives, we will say that there is risk in every single investment you make. At the end of the day, it’s not a matter of avoiding risk; it’s about managing risk. This distinction is one that is all too often lost in the conversation with investors.
This week, the Attain team will be in attendance at three different financial conferences â€“ the Skybridge Alternatives Conference (SALT), the Chartered Finance Analyst Institute National Conference (CFA), and the National Association of Personal Finance Advisors National Conference (NAPFA) - and speaking with professionals from every corner of finance to find out why they use alternatives, with a goal of taking away some of the stigma that hangs around the term “alternative.” But we’ll also be asking another question of those who are not investing in alternatives â€“ why not?
For us, and them, that may be the most important question of all.
Forex trading, commodity trading, managed futures, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.
The entries on this blog are intended to further subscribers understanding, education, and â€“ at times- enjoyment of the world of alternative investments through managed futures, trading systems, and managed forex. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts.
The mention of asset class performance is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.) , and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices: such as survivorship and self reporting biases, and instant history.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.