If you are thinking about investing in futures but you are not sure if you know enough about the market to do so, then you should think about investing in managed futures. This is essentially just investing in the futures market, except that you’ll be able to get somebody else to manage your portfolio for you. This is a good option if you are worried about losing money due to not knowing enough about the commodities you’re trading on.
You can get managed futures accounts, for instance. These are just like joining a mutual fund. There will be a futures manager who will keep track of which futures are good investments and then invest in those. The manager will make sure that only futures that are likely to turn a profit are invested in.
The biggest difference between managed futures and regular future trading is that you will probably not end up purchasing any of the actual commodities that you are trading futures in. Instead, the fund manager will usually purchase futures until they go up in value and then sell them.
The nice thing about managed futures is that they are a good way to add to your portfolio without adding a significant risk. In fact, these are usually a fairily low risk if only for the reason that they are being managed by somebody who knows how to follow the futures market.
Another advantage of using managed futures is that you can be sure that the person who is watching over you money is probably one of the best people for that job. Managed futures are generally watched over by people called commodity trading advisors. These people have been extensively trained in what to keep track of when it comes to futures trading. Additionally, commodity trading advisors are required to undergo an FBI background check before they can start managing futures.
Therefore, if you are interested in trading in the futures market, but you are not looking to actually purchase commodities, then you should look into managed futures. This is a good, low risk way to pad your portfolio – and have your money watched over by a professional.