The recent sell-off in the commodities market is yet another example of why investors should consider diversifying away from “buy and hold” strategies.  First, I still believe that we are still in the midst of a long-term bull market in commodities. However, the downward moves we have seen in oil, gold, silver, and other commodities once agan shows investors that the commodity bull market will have several vicious pullbacks.

For some investors, holding onto the long-term focus works. In essence, they implement a simple “buy and hold strategy”. They can easily ride the volatility and fluctuations that occur in their accounts. For most investors, however, these vicious sell-offs can often shake their confidence in the markets.

Managed futures allow investors to diversify across several different commodity trading advisors that implement different trading strategies. Some might thrive in volatile market environments, while others might incur a drawdown. Some CTAs( predominantly trend followers) do well in trending market environments( whether up or down), but often incur drawdowns during choppy market environments. The goal is really to have a portfolio of managers that are diversified across a variety of strategies, markets, trading time frames, and style of trading.  Contact Balarie Captial Management for more information or access our CTA database

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.  THERE IS SIGNIFICANT RISK OF LOSS WHEN TRADING FUTURES AND OPTIONS. ALWAYS REVIEW A DISCLOSURE DOCUMENT BEFORE INVESTING IN ANY MANAGED FUTURES PROGRAM.