Why Would Anyone Consider Investing in a Commodity Trading Advisor Managing Over $20 Billion Dollars?
There are those that follow the herd in their investment strategies. They feel comfortable because other investors have piled into these huge CTAs (commodity trading advisors).
The bigger the safer????
Do not think so. Everything has risks and size does not mitigate risk.
In my opinion I feel this is a terrible mistake and the investors who thought they made a safe investment will regret their allocation. You never know which markets will trend and create an opportunity. These huge commodity trading advisors are too big to trade many of the markets. I doubt they were involved in Orange Juice or natural gas. Both of these markets have seen nice moves. My mantra is make myself available for any potential trend if I can put on a low risk bet compared to my core equity. Everything is a risk. As well I prefer investing with smaller commodity trading advisors who stand the potential to take advantage of any potential trend.
These giant commodity trading advisors were involved last year in the interest rate markets. The interest rates are the only ones big enough for them. My simple question is what will happen when eventually these markets chop around?
I surely would not want to invest with these giant CTAs(commodity trading advisors).
In my opinion the real potential for returns are commodity trading advisors who are nimble enough to trade any trending market. I invest with smaller CTAs due to this fact.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.