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Alternative Investments   PDF  Print  E-mail
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
Wealth management 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 Asset Classes
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.
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Commodity broker, futures broker and forex broker offering online trading and full service brokers. Trade Center specializes in managing commodity trading systems and futures trading systems. Highly experienced brokers in trading systems.

June 16, 2004, 10:30 pm