It should be no surprise that in the highly complex and challenging field of commodity futures trading that the vast majority of non-professional or amateur traders do lose. Studies have shown professional Commodity Trading Advisors do experience an appreciably higher success rate than the individual amateur trader. While the attractive returns possible through managed futures is one main reason many investors participate, another very important reason for participating in managed futures has its foundation in Modern Portfolio Theory. The premise of Modern Portfolio Theory is the risk of an investment can be reduced and performance increased by holding a number of uncorrelated investments in different asset classes, which do not move in lockstep with each other. Professionally managed futures fits this description quite nicely.
Futures are a distinct asset class different from securities.
As independent studies and actual experience has shown, futures can increase performance and balance the risk in an overall portfolio . Futures' ability to enhance returns in an overall stock and bond portfolio was documented by the prestigious investment banking firm of Goldman Sachs . Based on its research, Goldman Sachs recommends that futures be included in their clients' investment portfolios. Now here s a study which should really open up your eyes. You can pictorially see these studies in graph form and detailed in Vision's highly informative brochure, Managed Futures, A Balanced Approach .