This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Managing the Futures

Stocks in this article: GOOGFB

NEW YORK ( TheStreet) -- Given current market conditions, investors would be well served looking for further diversification opportunities. One such opportunity is with managed futures.

Managed futures is an alternative investment class in which investors allocate funds into various trading programs run by Commodity Trading Advisors. These advisors seek potential profit opportunities in various futures markets, utilizing multiple strategies such as long/short strategies, option writing and spread trading, among others.

Why can this be a viable strategy?

Stocks have continued to move higher, with seemingly no end to the rally in sight. In fact, the benchmark S&P 500 index has covered a lot of ground very quickly in recent weeks moving from the 1640 area to Monday's highs in the 1762 neighborhood -- all in a span of 19 days.

The Nasdaq has seen similar price action covering a vast amount of upside very quickly. Shares of high flyers such as Google (GOOG) and Facebook (FB) seem to be strengthening every day. Many would argue that valuations are getting a bit heated at current levels and the recent euphoria seen in stocks could be cause for concern.

John Hussman of Hussman Funds recently gave his thoughts on the market, noting, "If you picture a small child throwing a stone upward and out over the edge of the Grand Canyon, you'll get a general idea of the market trajectory that we expect over the completion of this cycle."

No one can see the future. No one knows exactly how markets will react once the Federal Reserve begins removing the punchbowl. The best investors can do is try to play the odds as much as possible. We are currently in the fifth year of an aging bull. Although the market could continue to go up, cashing some chips in at current levels may not be a bad idea.

At the very least, we feel that it is important to position your portfolio for further upside but also a downside turn in markets if or when it materializes. We feel that proper diversification is the key to long-term investing success.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs