From the March 2014 issue of Futures Magazine • Subscribe!

Preparing to invest in managed futures

A few weeks ago, an article in The Wall Street Journal captured the essence of managed futures. The article argued that while the inherent risk in managed futures can be daunting, it is precisely what renders the asset class an effective alternative investment. 

To avoid managed futures altogether is to miss out on the opportunity to mitigate the market risk that every investor is exposed to with traditional investments. And because market risk cannot be dealt with through diversification of stock holdings, passing up managed futures excludes the most proven non-correlated investment to diversify your holdings. 

Over the past decade, familiarity with managed futures has grown. The asset class is no longer just for institutional investors; retail investors and family offices are utilizing the space also. But to deconstruct myths and stereotypes and genuinely derive a broader understanding of the importance of managed futures in a portfolio, more quality education is needed. And like all asset classes, managed futures has a variety of products of varying value. Here we will help you learn how to choose the best ones and make the case for a diversified portfolio (see “Top 5 reasons to allocate to managed futures,” below). 

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