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  • I Advice - Managed Futures: A Cure for 'Buy-and-Hold' Investor Strategies

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    recent years, this practice has spread to pension funds, endowments, trusts and banks.

    Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

    It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 m

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    Does it make good sense to buy a truck load of stocks when sourpuss pundits are negative about the economy?

    Stock investor and author Ken Fisher thinks so. In his new book The Only Three Questions That Count, Fisher preaches against listening to the gaggle of grousers who complain that the United States is on the verge of monetary self-immolation.

    Instead, Fisher uses the collective voices as a kind of technical indicator: loud, shrill cautionary declarations mean buy, buy, buy.

    Boiled down, the message Fisher and Forbes publisher Rich Karlgaard, whose column in the January 29, 2007 issues of his magazine features Fisher’s book, may be this: Don’t listen to what might happen. Watch what the markets are actually doing.

    Fisher and Karlgaard may have good reason to crow, if the record highs in the Dow Jones Index mean anything. In spite of growing deficits and a bloated war budget the stock market closed strong in 2006 and has started the New Year in fine style. Who can argue with success?


    Me.

    I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

    But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

    There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks that are liquidated after a year or more of ownership.)

    The method I’m referring to is managed futures.

    Managed futures are not new. Investment managers have been using managed futures for more than 30 years to diversify and stabilize portfolios. In recent years, this practice has spread to pension funds, endowments, trusts and banks.

    Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

    It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 mo

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    buy.

    Boiled down, the message Fisher and Forbes publisher Rich Karlgaard, whose column in the January 29, 2007 issues of his magazine features Fisher’s book, may be this: Don’t listen to what might happen. Watch what the markets are actually doing.

    Fisher and Karlgaard may have good reason to crow, if the record highs in the Dow Jones Index mean anything. In spite of growing deficits and a bloated war budget the stock market closed strong in 2006 and has started the New Year in fine style. Who can argue with success?


    Me.

    I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

    But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

    There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks that are liquidated after a year or more of ownership.)

    The method I’m referring to is managed futures.

    Managed futures are not new. Investment managers have been using managed futures for more than 30 years to diversify and stabilize portfolios. In recent years, this practice has spread to pension funds, endowments, trusts and banks.

    Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

    It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 m

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    e style. Who can argue with success?


    Me.

    I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

    But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

    There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks that are liquidated after a year or more of ownership.)

    The method I’m referring to is managed futures.

    Managed futures are not new. Investment managers have been using managed futures for more than 30 years to diversify and stabilize portfolios. In recent years, this practice has spread to pension funds, endowments, trusts and banks.

    Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

    It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 m

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    When I first meet them, many of the business owners and Entrepreneurs that I work with would prefer to avoid the whole issue of marketing altogether. They want to leave marketing up to the "creative" people on their team and focus on the more tangible aspects of business. Or they don't see the need for marketing and prefer to rely solely on a strong sales team. The exact opposite approach is needed for businesses that want to dominate their market and achieve stellar results.If you own a business, you must accept the fact that you won't be able to create sustainable, profitable growth without continually expanding your marketing knowledge.
    ns of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks that are liquidated after a year or more of ownership.)

    The method I’m referring to is managed futures.

    Managed futures are not new. Investment managers have been using managed futures for more than 30 years to diversify and stabilize portfolios. In recent years, this practice has spread to pension funds, endowments, trusts and banks.

    Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

    It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 m

    A Credit Card Can Sing A Christmas Carol
    “Christmas Time, Mistletoe and Wine” How many times have you heard this so far and its only November? A few I’ll bet, but with Christmas seemingly becoming earlier to us each year, we will no doubt feel the need to get ahead with our present and food buying. This though only leads to us spending more than we should. This is because with the shops full of decorations and Christmas tunes, the stores are dictating to us that we have to buy our gifts now, which will mean by the time December has come and gone. We would have spent more over the 2-month period that the shops have been full of Christmas cheer.This is not all bah! Humbug.<
    recent years, this practice has spread to pension funds, endowments, trusts and banks.

    Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

    It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 months. One reason for this incredible growth is independent studies that show managed futures offer far too many benefits for wise investors to ignore:

    -
    Reduced portfolio volatility risk
    -
    Possible enhanced portfolio returns
    -
    Opportunity for gains in any economic environment – and “hard” times are often very good for commodities
    -
    Easy access to global markets

    Perhaps one of the most significant studies of managed futures was released in 2004 by the Yale International Center for Finance. Authors Gary Gorton and K. Geert Rouwenhorst wrote Facts and Fantasies About Commodity Futures after creating their own commodities index based on returns between July 1959 and March 2004. The authors discovered that between 1962 and 2003, “the cumulative performance of futures has been triple the cumulative performance of ‘matching’ equities.”

    The term ‘matching’ equities refers to stocks that are related to commodities. Many investors buy oil and food companies, for example, rather than futures assuming stocks are the safer vehicle.

    But that fantasy is only one of many that Gorton and Rouwenhorst debunk with facts:

    -
    Volatility of the futures they studied was slightly below that of the S& P 500.
    -
    Equities have more downside risk than commodities. A stock can shrink to nothing very fast. But commodities like corn, sugar and oil, for example, will always retain value.
    -
    Commodity returns were “negatively correlated” with equity and bond returns. This means that commodities may do very well in the event of a stock market downturn or low interest rates.

    Finding the right managed futures fund can be tricky for amateurs, because there are so many to choose from, and many claim to offer excellent gains.

    To assist those investors who are eager to enhance their portfolios, George Mahshigian, a 30-year veteran of the markets, founded Lions Futures Management, Inc., a re

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