Why Systems Trading as Alternative Investment?

Friday May 18, 2012

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Alternative Investments

Worldwide Futures Systems is a specialist in the use of commodity trading systems as an alternative investment strategy to the standard stock and bond portfolio.

As early as 1950 University of Chicago economist Dr. Harry Markowitz developed the Modern Portfolio Theory. His Nobel Prize winning research showed that investment portfolios were strengthened by the addition of diversified investments with a low correlation. Later studies by Harvard professor, Dr. John Litner and the Chicago Mercantile Exchange confirmed that an alternative investment strategy of adding a diversified commodity portfolio to a standard stock and bond portfolio actually lowered risk and increased overall profitability. Additionally these alternative investments showed a low to slightly negative correlation to the rest of the portfolio. When stock and bond values increased so did the diversified commodity portfolios.

The real value to this alternative trading system strategy showed when stock and bond prices fell dramatically, the value of the commodity portfolios tended to increase dramatically. This negative correlation at times of loss for the standard portfolio is the real value of including diversified commodity futures as an alternative investment strategy.

Another great benefit of alternative investments is the exposure to markets not often included in traditional stock and bond portfolios, such as metals, oil and gas and currencies. Some of these markets are often directly responsible for adverse performance in traditional stock and bond markets, but when used in an alternative investment portfolio, they can be used to balance out the poor performance of you traditional portfolio.

At Worldwide Futures Systems we believe that our E-Mini day-trading portfolios offer an attractive alternative investment. It has no overnight exposure. It is designed to capture the daily direction of the market. Historically, it has made money in both up and down market days. Of course, past performance in not necessarily indicative of future results. These systems have shown a zero to slightly negative correlation to the standard stock portfolio. That is what makes them a great addition.

Learn more information on alternative investment management.

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An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources, and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Worldwide Futures Systems is a registered branch office and dba of Postrock Brokerage, LLC [NFA ID: 0413763]