Don’t listen to me; listen to El-Erian
Allianz’s noted portfolio manager, El-Erian , who established himself as a manger of great and global importance, was interviewed on CNBC this morning, September 14. The upshot was that clearly more financial market volatility was on the horizon. And the critical question as suggested by him was not the “whether or not” of volatility pick up but understanding how you, the investor, react to volatility. If you react poorly, then you might likely be taking equity assets off the table during meaningful corrections and adding assets when markets are reaching peak valuations.
Many investors would like to be like a Warren Buffett but they can’t. They do not have a long history of fearless purchases when blood is in the streets and gains realized in following years; they do not have a steady stream of large cash inflows that allow averaging of cost of purchases; and they are not sitting on a pile of cash in and above aforementioned large periodic cash inflows. When investors can accept that they cannot time markets…entry and exit and when they accept their adverse emotional reactions of fear or exuberance, then they can create portfolio solutions that possibly address their inclinations for self-inflicted investment wounds and, foremost, is inclusion of managed futures, an asset class that is designed to handle volatility across many and diverse financial, currency, and commodities markets
Jeannette Showalter, CFA
Worldwide Futures Systems
www.wwfsystems.com
[email protected]
239-571-8896
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 Walsh Trading INC