• The Role of Futures in Diversification
Futures constitute a beneficial asset class that can diversify traditional investor
portfolios in a prudent manner. The goal of diversification is to spread risk
among various asset classes preventing any one price or economic event from unduly
harming the portfolio while smoothing and balancing return. Traditional stock
and bond investors assume their portfolios are diversified when in fact, studies
show that stocks and bonds are highly correlated, tending to move in parallel
fashion. Alternatively, futures offer numerous opportunities for non-correlated
assets to be blended into portfolios, thereby accomplishing true diversification.
• Take a Total Portfolio View
for average and high-net-worth individuals begins with an appreciation of one's
total portfolio of assets-employment compensation, business ownership, pension
funds, real estate, art and antiques, cash holdings-not just the discretionary
capital intended for stock and bond investments. Using a total portfolio view,
an allocation of 5% to 25% in futures can be considered depending on the investor's
profile, return goals and risk preferences.
• Allocate Among 60 Worldwide Markets
Trade Center Inc. (TCI) specializes in diversification through futures investing
and the disciplined administration of futures trading systems. Computerized systems
are unique in their ability to scan worldwide futures markets on a daily or intra-day
basis searching for non-correlated trading opportunities. Diversified futures
provide traditional one-basket investors with access to approximately 60 different
futures markets domestically and globally. This broad range of assets allows TCI
to customize futures portfolio solutions to meet the special alternative investment
needs of individual clients.
• Understand the Characteristics of Different
To reduce portfolio risk and improve returns each asset class in a portfolio
must be balanced in terms of near and long-term potential for return,
specific risk, leverage, liquidity and independence between assets as
markets evolve through periods of stability and volatility.
How many different market sectors are there in futures? Learn
more about futures market sectors >>