A recent article in the The New Yorker  discusses how the market has changed over the last several months.  Volatility, for instance, has once again become a part of the trader’s vocabulary.  Consider the following excerpt:

Since the beginning of July, there have been six days on which the S. & P. 500 has gone up or down by at least two per cent, and daily moves of more than one per cent-like the ones we saw at the start of last week-have come to seem practically routine. Precipitous falls in the market have frequently been followed immediately by sharp rallies, and vice versa. And, while some of these moves have been occasioned by real news, more often it’s been impossible to tell just what made investors so damn exuberant or so gloomy.

Not that long ago, stock-market volatility appeared to be a thing of the past; between the end of 2003 and the end of 2006 there were only two days with moves of two per cent. But, ever since the credit crisis began, big moves have become common. ( Read Full Article)

Given the fact that the market conditions have changed, it is not surprising that many Commodity Trading Advisors are posting numbers that are substantially different than their previous track record.  Some managers have thrived in this market environment (and have been able to post above average returns) and others have incurred a significant drawdown.

Due to the changing market conditions, it is important to re-evaluate the managers that you have in your portfolio.  How has the CTA performed over the last 1-2 years? Are you noticing a change in risk-adjusted returns? Has the Commodity Trading Advisor been able to adapt to the current market environment? How have they performed against their peers? These are just some of the questions that have to be asked as you re-evaluate your current allocation.

Contact Balarie Capital Management if you are interested in finding out more about our recommended managers.

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.