Food Crisis while Futures Funds Fall the Most since 1987
Who do you believe?… Jim Rogers came out today and predicts food shortages. Jim Rogers thinks there will be food shortages because of the financial crisis. He believes the agricultural sector is low on funds and inventories are at the lowest levels in decades. An example is a recent trade that most trend followers are in is Sugar. Sugar is still 70% below it’s highs. Can you imagine the potential profits only if sugar rebounds 50%? The same can be said about gold or even coffee.
The back drop is that last year many abandoned managed futures and trend following because of lack luster returns. Actually Business week wrote an article discussing the dismal returns of the many of the leading trend following commodity traders.
So the question arises.. How does one make investments on conflicting stories? Who says it has to be simple. That answer is, it is useless to predict…rather it is most prudent to trend follow. When trend following you open yourself up to any potential outcome regardless of direction. Trend Followers stand to make money in any situation. Granted in an inflationary context, trend following commodity trading advisors stand the chance to make a fortune if there are trends.
I am convinced no one knows the future and the most prudent measure is to let the markets let you know what to do.
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Futures trading involves risk. People can and do lose money