A more liquid alternative to alternative investments catches on

Is there any data on the demand, and its growth, for alternatives – independent of growth in products?

Managed futures offer some of the best portfolio diversification value of any investment; and diversification is the one true “Free Lunch” of investing (meaning it provides the ability for an investor to earn both greater returns and less risk). But if a person starts with just considering long stocks, bonds and real estate as being the only portfolio options, then true diversification cannot be achieved. That’s why managed futures are so important. I discuss this throughout my book “Jackass Investing: Don’t do it. Profit from it.” (#1 Amazon Kindle best-seller in the mutual fund category).

My approach to diversification is quite different from conventional investment wisdom, however. One concept I think you’ll find most interesting is in that I replace asset classes with “return drivers” and “trading strategies” (as I point out in the book, asset classes are simply long-only trading strategies that do not attempt to disaggregate their many separate return drivers). Once viewed in this fashion it is easy to create a truly diversified portfolio, rather than one constrained by the shackles of asset classes.

I’m pleased to provide a complimentary link to the final chapter of the book, where I present the benefits (greater returns & less risk) of a truly diversified portfolio: http://bit.ly/vxDo6v.

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