Thursday, July 29, 2010

The Financials Pit Review For the week of July 26th, 2010


By PitGuru Frank LaMantia
Reports that the middle class is declining should be an eye opener to Wall St. Those who put money into the system from buying cars, houses, or vacations are struggling. If you break it down further this means less taxes for the government as many are still losing their jobs. 61% of Americans are living pay check to pay check and 31% have no retirement accounts. The retirement age, although not raised yet, is a topic that has people concerned. People are looking to work longer because of the 2008 crash. Some lost their entire retirement savings and now have to work another 10-15 years to make ends meet. People who are desperate will work for wages much lower than those with higher standards. Those who have higher education looking for jobs have resorted to working in the service industry. The only problem is people may work for lower wages compared to those with an education. To sum this up, consumers want to pay their rent and put food on the table. Let’s call this weathering the storm and not necessarily trying to find a career. (1)
The Euro has traded at 1.2937 and the U.S. Dollar Index has traded at 82.31. (2) Should this concern Americans? The reversal of the dollar VS the Euro should be something to watch. Follow this trend closely as this could be showing money being pumped into the system in Europe. Also, this may indirectly show the U.S. may be having issues with high debt.
Earnings seem to have less of an effect on the market than it has in the past. Eyes are focused more on the economic data that is coming in and less on how companies are doing. There are companies that have low debt and high cash reserves. These could be diamonds in the rough as some of these companies remain hidden due to the overwhelming stagnation of this market.
Past performance is not necessarily indicative of future results.

Sunday, June 6, 2010

A short explanation of managed futures investments.

Risks and Benefits of Managed Futures

Welcome to the world of cta managed futures! Before you open your first futures account, there are likely some questions you are asking…..what exactly can I gain from managed futures accounts and what are the risks for investing futures?

There is a substantial risk of a loss in all futures and options trading, no matter who is managing your money, so why try managed futures? Part of the reason some investors may decide that managed futures are a place for them to place their risk capital is that a managed futures fund may offer more diversity for a portfolio.

If you are a new trader and you have read about the risks associated with trading, but decide that despite the risks, you would like to invest in futures – what markets? Straight futures or options? Long options or short?

Some investors may see managed futures as a way to try techniques and a strategy that differs from their own portfolio efforts and knowledge base. Although, you will want to make sure that the risk tolerance level that the managed futures broker is taking is compatible with yours.

Alternately, a managed futures strategy may be implemented to try to hedge certain positions already in an investment portfolio. Correlated and non-correlated trades may offer a level of diversity that can be potentially beneficial in certain market conditions. However, there are still substantial risks of a loss, no matter what strategy is being used.

For example, an investor who has certain stock portfolios may choose to open an account with a CTA whose managed futures strategies include certain commodities such as livestock or gold, rather than putting all of their risk capital into stocks.

Click to register for free and learn more about the potential benefits – as well as the risks – associated with a diversified portfolio and managed futures!

Trading in futures and options involves a substantial risk of a loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.