ChatGPT, What a crazy, modern world we live in

December 5, 2022 rcm-alternatives 0 comment  Like
Investing Insight, Managed Futures

Ok,

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:

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.

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.

The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.

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. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.

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.

Limitations on RCM Quintile + Star Rankings

The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.

See the full terms of use and risk disclaimer here.

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