How to Invest With a CTA
Jerry Parker from Chesapeake was one of the original turtles. His record goes back to 1988. His Compounded Annual Rate of return is 14.19%. This means over 15 years a $100,000 investment with Jerry Parker turns to approximately $700,000. What is most interesting is what occurred last year to Jerry Parker. At his height Chesapeake had under management approx $2,000,000,000 ( $2 Billion dollars) however in May 2010 he had a draw down. Draw downs are expected unless one would want to invest with Bernie Madoff and not have small loses only to wake up one day to realize they were part of a Ponzi scheme. Assets under management of Chesapeake fell to approx $600 million. Assets now are approx $800 million. These investors that left Chesapeake made a foolish decision. Draw downs are as natural as breathing to trend followers. The key to successful investing with trend following commodity traders is to buy their draw downs and be committed to them as long as their strategy does not change. If one bought after the draw down of Chesapeake they would have returned approx close to 30%. The fact is you really never know when the draw downs end but you increase your probability of compounding your way to wealth by buying draw downs of successful long running commodity trading advisors.
Trend following is a lifetime strategy.
Futures trading involves risk. People can and do lose money