How To Invest in a Commodity Trading Advisor

Maybe it is human natureג€¦ maybe it is a lack of patience or disciplineג€¦or the new word courageג€¦why do so many lose money when investing with legendary Commodity trading advisors? I have seen it over and over again. A commodity trading advisor has a good runג€¦and then his assets under management swell. Then the inevitable happens the commodity trading advisor goes through a draw down or even a flat period and the investors jump ship. Assets under management plunge. Many investors lose money doing so. If only they had the discipline to stay with the managerג€¦they could have compounded their money over and over again. Some disciplined commodity trading advisors look at these clients that jumped ship as a trade that did not work. They did not take it personally nor cared. The commodity trading advisors are compounding their own money and fully realize that in order to be in this business, loses will happen, draw downs will happen and investors will only invest with the when they have positive results.
The real key in investing with commodity trading advisors is to fully understand how the manager thinksג€¦manages riskג€¦and how he trades. One should not be full of unrealistic expectationsג€¦ Nothing has to happen in commodity trading..in fact ..most of the time it does not. We only get these rare huge moves every couple of years.. But successful, disciplined commodity trading advisors make themselves available. They do not give up during a draw down. They keep on going..If you want to be a successful commodity trading investor you will need to also.
Look at this manager.. Yes,Bill Dunn of Dunn Capital Management has some volatile results, he has compounded money since 1974. The results speak for themselves.. on the chart below from 1984 to 2009 approx 25 years on average Bill Dunn generated 14.47%. Putting this in another contextג€¦ 100k turns into virtually $3,000,000. This is my point. One can compound their way to wealth by diversifying among commodity trading advisors and being patient and disciplined.

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