8 Months and No profits with Trend following
This is the reality when trend following. You do not make 1% a month like in the good old Madoff days. The reality when trend following a basket of commodities is there will be periods you do not make any money. Actually 8 months is not that rare. More so there are periods which are even worse. From approx 2004 to mid 2007 you had more than 24 months of no profits. Experienced trend followers and investors in commodity trading advisers understand they will go through periods like this. They are not fun and test the emotional endurance of both the commodity trading adviser and his investors. However, as much as past performance is not indicative performance, some market or markets unexpectedly start to trend & profits are once returned. No one ever knows which markets will trend. The direction of them also does not matter. Trend followers will easily go long as well as short. Markets trend due to fear, drought, greed, nature, economic or countless other reasons. These reasons do not matter. What matters is having a well thought out plan, trying to mitigate draw downs during these common periods in which nothing happens and making yourself available when & if there are trends.
Trend following as I say repeatedly is not retirement in a box. It takes a great deal of patience and emotional fortitude. What I find most interesting when speaking to investors is how apt and willing they are just to be invested in the stock market or bond market and almost at the mercy of the market. Over a 10 year period the stock market did not return anything if at all other than a massive spike downward in 2008. The stock market does not have to continue upwards all the time. All one has to do is look at Japan. Japan hit a high in 1989 of approx 39,000 and today it is hovering around the 10,000 mark. This is a lesson that investors need to take into account. Anything can happen in the markets. Blind investing (as well as all investing) can be harmful to your net worth. Have a plan. Be diversified. I suggest allocating at least 5% of your net worth into managed futures. There are risks, past performance is not indicative of future returns but there is the possibility of profit over time.
Good luck in your investing.
Abraham Investment management
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.