If you haven’t been watching Twitter go crazy over ChatGPT the past few days, you’re missing out. Here’s a nice piece explaining some of the cool stuff we’ve seen just in a few days since it was released:
🤖 Here’s a little overview of all the crazy stuff I’m seeing with the new ChatGPT.
What it is, what it does, and the disruption it WILL bring.
It’s full of a dozen examples (some you probably don’t want to see depending on your profession).https://t.co/0rJnw20WIV
— Travis Jamison 💥 (@Travis_Jamison) December 4, 2022
You can head over to https://chat.openai.com/chat to sign up for free and try it yourself, but our own Jeff Malec wondered what it would say about managed futures abilities to diversify a portfolio and gave it a try, in his tweet thread here: https://twitter.com/AttainCap2/status/1599856543012618240
Here’s what he put in the AI Chat =
Write a blog post explaining how managed futures diversifies investor portfolios, provides crisis period performance, and helps as an inflation hedge though its use of commodities and the ability to go short markets such as bonds and foreign currencies.
And here’s what came back =
Managed futures, also known as commodity trading advisors (CTAs), are an investment strategy that uses futures contracts to diversify an investor’s portfolio. This type of investment is attractive because it offers a number of benefits, including the ability to provide better returns in times of economic crisis and to hedge against inflation.
One of the key benefits of managed futures is the fact that they diversify an investor’s portfolio. By investing in a range of different commodities and futures contracts, managed futures can help to reduce the overall risk of an investment portfolio. This is because different commodities and futures contracts tend to be affected by different economic factors, so if one market is performing poorly, the others may still be doing well. This means that managed futures can help to smooth out the overall returns of an investment portfolio, providing more stable and consistent returns over time.
Another benefit of managed futures is their ability to provide better performance during times of economic crisis. This is because many CTAs are able to go short, which means that they can profit from falling prices as well as rising prices. This means that when the overall stock market is experiencing a downturn, managed futures may still be able to provide positive returns. This can help to protect the overall value of an investor’s portfolio and provide some much-needed stability during times of economic uncertainty.
Finally, managed futures can also help to hedge against inflation. This is because many CTAs invest in commodities such as gold and oil, which tend to retain their value even when inflation is high. By investing in these types of assets, managed futures can help to protect the overall purchasing power of an investor’s portfolio. This is especially important in today’s economic environment, where many central banks around the world are using monetary policy to stimulate their economies, which can lead to higher levels of inflation.
In conclusion, managed futures are an attractive investment strategy because they offer diversification, better performance during times of crisis, and the ability to hedge against inflation. By investing in a range of different commodities and futures contracts, managed futures can help to reduce the overall risk of an investment portfolio, provide more stable and consistent returns, and protect against the impact of inflation.
Pretty crazy tech, for sure. How did it do compared with our ‘Why Managed Futures” page here: https://www.rcmalternatives.com/services/futures-traders-hedgers-commercials/managed-futures/?
We also asked it to add an NFA disclaimer, which was quite good and nearly what is required =
It’s important to note that managed futures investments are regulated by the National Futures Association (NFA), a self-regulatory organization that works to protect market participants and promote integrity in the futures industry. All commodity trading advisors (CTAs) must be registered with the NFA and must comply with strict rules and regulations designed to protect investors.
When considering a managed futures investment, it’s important to verify that the CTA is registered with the NFA and to research their track record and compliance history. You can search for registered CTAs on the NFA’s website and view any disciplinary actions or customer complaints that have been filed against them.
Additionally, managed futures investments are generally considered speculative and may not be suitable for all investors. It’s important to carefully consider your investment objectives and risk tolerance before deciding if managed futures are right for you.
What a crazy, modern world we live in.