Last week, we dedicated everything we had to attending multiple conferences and absorbing as much as we could about alternative investing trends in the industry. If you’re interested in what we found out, it’s all up on the blog for your perusal. But as we said throughout the week and for hours back at the office, Europe is flat out dominating the conversation among investing professionals. Whether or not they’ll admit it out loud, people are nervous. There’s marketing spin everywhere you look, but one scratch below the surface tells us that there is a real fear that we could be witnessing the unraveling of the European Union in slow motion… and the global financial system is biting their nails over the fallout, from bank exposure to investor confidence to overall liquidity.
While these are interesting times, I guess you could say we aren’t quite at the Mayan’s level on what the end of the year will bring. Make no mistake- there is volatility on the horizon, and it may end up being a bitter pill to swallow for most of the investing population, as their attempts at diversification fall victim to the rising correlation of asset classes. However, in the managed futures world, there’s a sense of “been there, done that” that gives us a slightly different perspective. Banter in our office has been less focused on Greece and more focused on some of the managers that have either already been tearing it up in this climate, or positioning their portfolios to capitalize should things worsen from here. To be fair, there are other managers who are struggling, and past performance is not necessarily indicative of future results, but the tides seem to be shifting in a way that we can’t help but get excited about.
See, while we’re always trumpeting the benefits of managed futures for a portfolio, we feel like the current environment is getting set up for moves that could benefit managed futures in a big way. To understand why that’s the case, we have to understand how the buzz words of the day- “liquidity,” “debt,” “volatility,” and “risk”- play into the market movements we’re witnessing right now, and could impact the markets tomorrow. At that point, we can take a look at how managed futures has performed during those periods in the past, and then you might understand why we’re a lot less “somber” than the rest of the investing world right now.