We don’t like the old school buy and hold stock approach, as many of you know.
But that doesn’t mean there aren’t some smart people out there talking about stocks. Barry Ritholtz and Josh Brown, for starters. We respect them because they have long scoffed at the idea of “buy, hold and pray” as an investment strategy, preferring tactical asset allocation over the typical stocks casino approach.
One piece of advice they’ve repeated on many occasions is that the silver lining of stocks plummeting is the opportunity to do some bargain shopping. But this isn’t run of the mill, stop-in-because-you-see-a-sale-sign bargain shopping. This is like those people who prepare and train for those Black Friday discounts every year. You’ve got to get ready BEFORE the doors open, or you’ll miss your chance.
Brown, in particular, suggests that you make a list of the stocks you wish you had, and the price they’d have to dip to for you to justify buying them. As the old saying goes: If you liked it at $50, you’ll LOVE it at $25. Not bad advice if you must go the stocks route, and it made us think that investors should be doing the exact same thing with managed futures programs.
Maybe you don’t have $500k to put into Integrated right now, or are worried that the multi-year highs for Emil Van Essen are unsustainable in the short term. Whatever the case, there comes a time for all but those with unlimited funds where they say: “I like that program, but just can’t afford it right now,” or “I want into that program, but not here at all time highs when xxx is about to happen.”
Most brokers will tell you not to wait, to do what you can to get in now. But our advice is to go ahead and wait. Put those programs on your shopping list alongside the bread, milk, and any stocks you would like to own at a better price.
And unlike stocks, where there can be extended multi-year moves higher despite all that is wrong with them – regular drawdowns are a fact of life in the managed futures space – meaning that program you like will be down at some point. The minimum will usually remain the same, unlike stocks, where your investment amount falls along with the stock price. But the amount at risk can come down with a managed futures program in DD.
So get out your pen and paper (or iPad) and make a wish list of programs you would invest in, should you come into some money, see a new max DD in that program, or find yourself with gains elsewhere in your portfolio needing further diversification. In the investment world, the store will come to you, not the other way around… so make sure you have your list ready for when it shows up.
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark 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, self reporting, and instant history.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.
See the full terms of use and risk disclaimer here.