Last week, we dedicated everything we had to attending multiple conferences and absorbing as much as we could about alternative investing trends in the industry. If you’re interested in what we found out, it’s all up on the blog for your perusal. But as we said throughout the week and for hours back at the office, Europe is flat out dominating the conversation among investing professionals. Whether or not they’ll admit it out loud, people are nervous. There’s marketing spin everywhere you look, but one scratch below the surface tells us that there is a real fear that we could be witnessing the unraveling of the European Union in slow motionâ€¦ and the global financial system is biting their nails over the fallout, from bank exposure to investor confidence to overall liquidity.
While these are interesting times, I guess you could say we aren’t quite at the Mayan’s level on what the end of the year will bring. Make no mistake- there is volatility on the horizon, and it may end up being a bitter pill to swallow for most of the investing population, as their attempts at diversification fall victim to the rising correlation of asset classes. However, in the managed futures world, there’s a sense of “been there, done that” that gives us a slightly different perspective. Banter in our office has been less focused on Greece and more focused on some of the managers that have either already been tearing it up in this climate, or positioning their portfolios to capitalize should things worsen from here. To be fair, there are other managers who are struggling, and past performance is not necessarily indicative of future results, but the tides seem to be shifting in a way that we can’t help but get excited about.
See, while we’re always trumpeting the benefits of managed futures for a portfolio, we feel like the current environment is getting set up for moves that could benefit managed futures in a big way. To understand why that’s the case, we have to understand how the buzz words of the day- “liquidity,” “debt,” “volatility,” and “risk”- play into the market movements we’re witnessing right now, and could impact the markets tomorrow. At that point, we can take a look at how managed futures has performed during those periods in the past, and then you might understand why we’re a lot less “somber” than the rest of the investing world right now.
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.