November 1, 2024
rcm-alternatives
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When Paul Tudor Jones speaks – people listen. He is known as one of Wall Street’s most successful macro traders, with a legendary track record spanning over four decades. His status as a trading legend was cemented in history when he famously shorted the 1987 market crash, delivering a reported 200% return for his investors that year. [Past performance is not necessarily indicative of future results]
So when PTD gave his two cents on CNBC last week, our ears sure perked up:
The want for increased commodity exposure is a clear choice based on the stats, if he thinks more inflation is coming. While stocks and bonds often show negative real returns during inflation, commodities perform almost as well as gold in protecting value – posting about a 15% average annualized return during inflationary periods dating back to 1970, as can be seen in this chart from our trend following guide whitepaper.
Problem is, commodities are known for some rather nasty volatility, even when they are in up trends thanks to inflation. Enter Trend Following, which doesn’t just buy and hold commodities, torpedoes be damned… and instead employs dynamic positioning which only holds each commodity long when it is in a confirmed uptrend. The below research shows that trend following approaches in commodities have historically outperformed buy-and-hold strategies during inflationary periods, second only to energy sector performance.
Now, trend following based managed futures programs won’t be loading up on just Bitcoin, Gold, and Commodities like PTD says he is doing. And they don’t position portfolios on who they ‘think’ will be elected, thank goodness. They will wait patiently for those sectors, and others, or breakout one way or the other.
That approach is a bit better in our opinion, because what if good old PTD is wrong? We’d rather be a bit late to the party and risk a small portion of our principal on a computer model confirmed uptrend, than throw caution to the wind and bet it all on red (states), PTD style. He became a legend doing that sort of thing… but let the pros be the pros… He can afford to be massively wrong. For the rest of us, wouldn’t you rather just be a little bit wrong… and able to be quite right, if the trends develop?
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.
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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.
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