2010 is fast approaching. I have had conversations with colleagues..and the issue that was brought up so many times was 2007-2009 just a fluke or the beginning of something more serious. As usual... I told them to their discern I do not know the future. However in all reality... if we ran our personal households how the central banks and banks ran their portfolios we would be living on the street and I feel there will be a price to pay. The real problem throughout the world is debt, both Govt debt and personal debt. The reality is both the borrowers and the lenders have a serious problem. The borrowers can be wiped out... but what will the lenders do with anything from worthless debt or run down real estate? More so the fact,there are starting to be shortages of basic foodstuffs could make for scary headlines. The fact is India has imported rice for the first time in I do not know how long. There are droughts stretching the globe. This is a fact.. not a headline. Argentina is not exporting soybeans. What does all of this mean? I believe we are in a period... not to see how much we can make... but rather how much we can protect! Not a return on investment...but rather a return of investment. I am not implying to freeze and do nothing. Even leaving your money in the bank you can lose money due to inflation.... Even thinking about putting all your assets in gold you can lose money. Anything can happen. Gold can go to $4,000 an ounce or $400. One must really believe anything can happen... So how should you invest in 2010? I think the word is cautiously and with a plan. This is how I explain to potential clients. Everyone wants to find someone who has the answer...That is why they watch CNBC or Bloomberg thinking some expert will tell them something that is a secret. Well in reality that will not happen. The key this year as well as all other years is to diversify ...be cautious...be realistic...and have a plan. In my personal opinion...I feel the safest place for my money is in trend following strategies over a large basket of interest rates, currencies, commodities, stock indexes, energies etc. Further more I spread out my assets with NEVER more than 5% in any idea ( even the trading programs I do in our commodity pools and trading accounts). I believe in allocating to other commodity trading advisors who understand risk...have a plan...that are disciplined...and patient..In this manner I am not predicting anything rather attempting to make myself available for any outcomes. What is the best aspect of commodity trading and trend following is the liquidity...( I can liquidate my whole portfolio with in a minute or so) as well as liquidate my managed accounts very quickly...transparency as well as the regulatory that Hedge funds do not have. The problem is people think commodity trading is risky. More so I have seen this all too many times..They allocate to a commodity trading advisor when they have a good run...and then leave when there is a draw down. This is completely the wrong idea if someone wants to compound their money or use their money as inventory to make more money. So how should you invest in 2010? Ask yourself really what changed... Did the banks write down all their losses..NO! How is the rate of employment? I do not need to answer! Have foreclosures stopped? 2010 should be time of being aware of the risks that can plague you! Consider allocating some of your portfolio in trend following and managed futures. Learn about managed futures and trend following.
Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
Article Source: http://www.articlesbase.com/personal-finance-articles/how-should-you-invest-in-2010-1535576.html
About the Author:
My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres to the philosophy of trend following. Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals.