My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I adhere to the philosophy of trend following.
Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets me apart from other traders is that I am not only concerned about the return on investment but how much risk I will have to tolerate to achieve my goals.
How Not To Invest in a Trend Following Commodity trading advisor
It always shocks me that so called investors run for the doors when a commodity trading advisor has a draw down. The fact is as much as they are not palatable for investors to go through they are as normal as breathing out. I look at draw downs of successful long term commodity trading advisors as an entry point almost like buying a stock at a discount.
A good example of a trend following commodity trading advisor who has been around since 1988 and was an original turtle is Jerry Parker of Chesapeake Capital Corporation. He has a compounded annual rate of return close to 13%. Compare this with the stock market over the last 10 years yet you have investors seeking ideas just on stocks while Jerry Parker looks for trends in various asset classes in over 90 markets. Instead of taking advantage of this years 17% draw down investors withdrew their funds from Chesapeake Capital Corporation. This is so totally ridiculous and flawed. Chesapeake Capital Corporation has gone from almost $2 Billion dollars to $600 million. Has anything structurally changed with Chesapeake Capital Corporation??? Probably not…as I stated… draw downs as uncomfortable as they are ….are as expected as breathing out.
If you want to attempt to compound your way to wealth… There are various ways..one of them is allocating no more than 2-5% of your net worth to proven trend following commodity trading advisors. This is what I do …as well as I trade my own programs as well as a program with my partners in which we too strive to develop a track record.
After all my years of investing..no other strategy offers liquidity…transparency as managed futures. You can liquidate your entire portfolio ( granted there are no limit locked markets you are invested in) within minutes.. Try doing this with real estate….
Have a plan…Know exactly where to buy…where to sell and mostly how much…Diversify..Diversify…and watch your leverage.
Andrew Abraham
A.Abraham@AngusJackson.com
www.Angusjackson.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
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