From the April 2013 issue of Futures Magazine • Subscribe!

Jack Schwager: Chronicling trading excellence

Q&A

FM: How has your profession investments performed?

JS: I have a number of projects. The main one right now is acting as a portfolio manager for ADM [Investor Services Diversified Strategies Fund]. I don’t talk about returns, and we just started in the middle of last year. It is basically a fund of managed accounts of futures or FX managers. The number is in the 20s and the allocation process is risk based.

FM: What is your ideal portfolio allocation?

JS: I guess that would change over any given period of time. A diversified portfolio of CTAs should be a good part of it. A good sum of it should include some hedge fund investments, and if you wait for periods where equity markets have drawdowns, establishing long positions in equities would be OK but not after a [strong up move].

FM: You wouldn’t have a certain percentage always dedicated to equities?

JS: No, I don’t believe in having a certain percentage [permanently] allocated to equities. I believe in allocating to equities when they are doing terrible and allocating to CTAs/hedge funds [strategically]. I certainly don’t believe in any balanced portfolio type of mechanism or guideline. That could be dangerous. Any investment I might have [right now] would not have a long fixed income element. I could be wrong but from a long-term return to risk, there is much more risk than return in being long [bonds] than being short or flat. While it is traditional to have 40% of your portfolio in bonds, it could be a very bad thing to have. That falls under the realm of a market forecast; let me make clear that I don’t consider myself a market wizard. 

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