Managed Funds
"Portfolios...including judicious investments...in leveraged managed futures accounts show substantially less risk at every possible level of expected return than portfolios of stock (or stocks and bonds) alone."
Dr. John Litner
Harvard University
Successful investors and businesses know that the probability of their long term success is found in focusing on the management of risk. Potential returns on investments are most likely only as good as to how the risk of the investments are managed. Investment prudence dictates that diversification across non-correlated asset classes has the potential to manage financial portfolio risks better. The principal of diversifying risk is done by businesses and investors worldwide everyday whether they achieve this by allocating to non-correlated assets classes such as Managed Futures or having a highly diversified client base or a company which produces a wide variety of products and sells them throughout many markets. By using Managed Futures the principal of diversifying risk can be applied to financial portfolios and obtain the benefits described above in Dr. Litner's above quote.
Great Lakes primary Managed Futures approach is assisting clients in determining which CTA (commodity trading advisor) or group of CTA's has the potential to provide the best overall non-correlated diversification to their financial portfolio. Great Lakes feels the main criteria which should be used when choosing a CTA is what is their average drawdown when market conditions are going against their positions and market approach. The reason for this is that it is the long term management of risk which provides the long term diversification opportunities. In addition it is imperative to review at what potential area a CTA is within their given trading cycle, most which are typically about 36 months. If a CTA is a good risk manager and is at a new equity high it is better to wait for the CTA to enter into a drawdown phase before considering investing with the CTA. Jack Schwager's book Managed Trading, Myths and Truths, (page 192, Wiley & Sons, Inc. 1996). illustrates this point.
" In retrospect, in considering this episode, I realize that it represents yet another facet of William Eckhardt's ( a highly successful trader and CTA), general contention that the natural human tendency to do what feels comfortable will lead people to do what is wrong in the market. (Jack Schwager, New Market Wizards, HarperCollins, 1992). For example holding on to a losing trade, hoping that it will recover, is more comfortable than getting out of the position and locking in the loss, but it is also usually the wrong thing to do. Similarly, shifting assets in a multimanager fund to those CTA's who are in the midst of an upside excursion is far more comfortable than shifting assets to those CTA's who are experiencing drawdowns, yet I would argue that it is empirically demonstrable that the latter is actually a far superior strategy."
Great Lakes looks forward to addressing your portfolio diversification needs through its 3 step process of:
1. Locating CTA's suitable to your specific portfolio diversification needs.
2. Identifying CTA's which demonstrate the most prudent risk management.
3. After the above two criteria are met than assist in determining what potential phase of trading a given CTA's trading program is in.
Whether you are located in Michigan, Ohio, Indiana or Illinois of the Eastern Corn Belt of the Midwestern United States or around the world the alternative of Managed Futures can provide your portfolio the diversification you need to "weather" the volatility of present and future economic financial storms.
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Managed Futures can be used to diversify risk across a broad spectrum of financial assets: Individual accounts Corporate accounts and LLC's Individual Retirement Accounts (IRA) Sep IRA's Corporate Pension Plans |
Benefits of a Managed Futures Account within a well-balanced portfolio: Opportunity for reduced portfolio volatility risk Potential for enhanced portfolio returns Ability to profit in any economic environment Opportunity to easily participate in global markets |
Access the benefits of non-correlation for your
financial portfolio today! Please contact Great
Lakes for your free consultation.
FREE ACCESS (Click HERE) to large Commodity Trading Advisor Managed Futures performance history database. Sona Trading (Diversified futures trend following CTA) Kingdom Trading (Diversified short options CTA), (full risk disclosure document) |
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Open Mind: The second point of the philosopher Isidore as quoted by Thomas Aquinas regarding the nature of law: "That it be helpful to discipline, in as much as it is proportioned to the natural law" I have kept the above comment up for a long time because I think its relevancy in all things involved with the business of living will never go away. When one looks at the natural world it is immediately apparent that not only is "life" complex but it is also massively diverse. If Natural Law did not have diversity within it, I am not sure that humans would exist. It is in this context that I would say Natural Law indicates that diversity highly increases the odds of survival not only in living organisms but also in all matters of human existence from daily living needs to finances. I know some of you are thinking the dinosaurs don't exist anymore, however, they did last for approximately 165 million years. In addition when one considers alligators, sharks etc., some would argue that dinosaurs still exist, albeit on a smaller scale. If humans breed certain species in straight-line genetics (mating animals who are closely related to each other) in order to bring forth certain traits in animals, superceding the diversification of Natural Law eventually genetic breakdown will start to occur, i.e. disease, dwarfism, etc. Since humans are tied to Natural Law, as well as the raw materials of earth, which humans made into tradeable markets therefore so are financial markets tied to Natural Law. If humans financially "straight-line" their investments, just as in straight-line genetics the probabilities which occur from "things" becoming too alike could translate itself into financial difficulty. Managed Futures in my opinion, is the financial tool which helps you to allow the probabilities of diversification in Natural Law to work for you and potentially bring the opportunity of increased stability to your financial portfolio. Patrick Sullivan President, Great Lakes Trading Co., Inc. Risk Disclosure/Privacy Policy |
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