• Simplicity -- All trades are reported on 1 Form 1099 at year end
• No need track Individual Trades for the IRS
• Federal Taxes from Futures Trading Gains can be up to 34% less than Equities (40% / 60% split)

• Equities -- Stock Owned less than 366 days is "Short Term" (Ordinary)
• Futures -- Whether trade takes 5 minutes, 5 days or 5 months, 40% is "Short Term" and 60% is "Long Term" under the IRC Section 1256

• Returns are usually independent of U.S. stock and bond market trends
• Opportunity to participate in virtually all sectors of the world economy
• Flexible enough to profit as easily in rising markets as in declining markets
• Potential to perform well in both inflationary and deflationary periods (unlike stocks).

1. The potential role of managed futures accounts in portfolios of stocks and bonds by Dr. John Litner, Harvard Professor (1983).

Dr. Litner concluded that the combined portfolios of stocks after including judicious investments in leveraged managed futures accounts show substantially less risk at every possible level of expected return than portfolios of stocks alone.

Litner specifically showed how managed futures can decrease portfolio risk, while simultaneously enhancing overall portfolio performance.

2. The benefits of managed futures by Thomas Schneeweis, Professor of Finance, University of Massachusetts (2002).

Professor Schneeweis destroys the myth of managed futures being more risky than stocks. He states that managed futures are not more risky than traditional equity investment. Investment in a single CTA is shown to have risks and returns, which are similar to investment in a single equity. Moreover, a portfolio of commodity trading advisors are also shown to have risks and returns which are similar to traditional equity portfolio investments.

3. Findings by Jack Meyer, the head of Harvard University's Endowment portfolio.

Holding commodities offers protection against the ups and downs of stocks and bonds.  They're the most diversifying asset in the portfolio.

The benefits of diversification are indisputable.  Diversification rules.  It's powerful and our portfolio is a good deal less risky than the S&P 500.

4. Barron's on Harvard.

Relying on techniques of Modern Portfolio Theory (MPT) to get the best returns with the lowest amount of risk, Harvard needed to cut its exposure to publicly traded U.S. stocks and bonds and increase its investments in foreign stocks, commodities and private companies. Right now, the Harvard endowment has about only half of its portfolio in U.S. stocks and bonds, compared to 75% with other universities.

5. Harvard University is not alone in using managed futures in their investment portfolio.

Other entities that include futures in their portfolios include Stanford, Notre Dame and major corporations and state pension funds (including Detroit & San Diego).

Exchange Publications - Additional Reading

According to the 1999 edition of the Chicago Mercantile Exchange's Q&A report on managed futures, of the 119 funds and pools in the Managed Account Reports Fund/Pools Qualified Universe Index that traded from Jan 1990 to October 1996, 81% were profitable over the full time period.

The Chicago Mercantile Exchange published a study concluding that portfolios assigned as much as 20% in managed futures yield up to 50% more than stock and bond portfolios, while possessing comparable risk.

A Chicago Board of Trade study showed that a portfolio without managed futures underperforms and is more risky than a portfolio that includes managed futures. From 1968-1995, in all of the worst declines in stocks listed, managed futures were positive, and even in the stock markets' best periods, managed futures were also positive.

1. Are managed futures riskier than stocks?

Technically speaking, futures are riskier than stocks because of the greater leverage in futures and the potential for unlimited risk. On a level playing field, managed futures are indeed no riskier than stocks. If futures are placed in the hands of accomplished advisors, we believe that the risk in futures becomes no greater than stocks and bonds. APEX investment strategists have adopted a conservative approach -- always have the clients interest as it main objective. Using a conservative approach to managing funds, including: 1) Rules to minimize draw downs, 2) No naked options and 3) optimized returns. APEX investment strategists use a joint approval process to assure all trades meeting pre-described rules. Strict Money Management rules are in placed at all times. Still, all clients must realize the risk of loss in trading commodities can be substantial. Therefore carefully consider whether such trading is suitable for you in light of your financial condition.

Let's look at a comparison between mutual funds and managed futures:

2. Who are managed futures investors?

Investors in professionally managed futures share common attributes and goals. We at GoTrade.US are sure that these investors are a lot like you. The only distinction will be in regards to affordability, investment temperament and risk tolerance. The characteristics of managed futures investors include:

• They change with the times and have broadened their selection of investment alternatives to take advantage of global opportunities
• They seek the expertise of professional portfolio managers knowing this gives them an opportunity for success
• They have recognized managed futures as a legitimate investment and are aware of its features and benefits, potential rewards and inherent risks
• They have chosen to invest in a managed futures program because of its ability to compliment their overall investment goals
• As independent thinkers, they make intelligent decisions based on facts and logic.

3. Can I track the performance of my managed account?

Of course.  There are three ways you can track your account. Firstly, a complete accounting of the activity in your account, including the account balance, can be seen 24 hours a day on Vision’s web site. Secondly, you may call your managed futures specialist, who receives a daily equity run detailing all your open positions, netting all profits and losses, showing the exact daily balance in your account. Lastly, regardless of whether you call or not, a purchase and sale statement will automatically be sent to your chosen mailing address on every single trade. The Purchase and Sale Statement shows the date and price entered, when you exit a trade, the date, price, net profit or loss on the trade and also your account balance. Furthermore, besides receiving a confirmation on every individual trade, a summary of all transactions showing their results are sent each month for the entire month's transactions. Therefore, even if you don't call, you will always be provided with a written, detailed report of the transactions and the performance of the account.

4. Are managed accounts viewed as a long- or short-term trading strategies?

We strongly advise that you do not evaluate the performance of your account on a trade-by-trade or a day-to-day basis. When opening a managed account you should be prepared to treat this investment as a longer-term investment even though these accounts do indeed offer a great deal of liquidity.

5. Can I use one trading system in concert with other trading systems?

Our managed accounts employ different trading systems with different investment objectives. These systems can be used in concert and help the investor to diversify even further. We provide a wide array of managed products and systems that cover a broad range of contracts with both long-term and also shorter-term objectives. The key to any investment portfolio is diversification; the blend of a shorter-term, index trading system such as I-Master with a longer-term, trend following system such as Aberration may be the solution your are looking for.

6. How are profitability, volatility and risk affected when managed futures are included in investment portfolios?

Harvard Business School Professor Dr. John Litner found that including managed futures in a portfolio "reduces volatility while enhancing return." And those portfolios "have substantially less risk at every possible level of return than portfolios of stocks, or stocks and bonds." For the period of January 1, 1980 to December 31, 1998, data show that managed futures investments (as measured by the Barclay CTA Index) had a compound annual return of about 15.8%. That compares very favorably with the 17.7% return that common stocks had during the same period, one of the strongest stock markets in U.S. history. Further, it exceeded the 11.8% return on bonds. Moreover, during a similar period (Jan. 1, 1980 to December 31, 1997), analysis showed that a portfolio that comprised some managed futures had similar profitability with far less risk.

7. Is a managed futures account appropriate as a short-term investment?

No. Futures markets, like most markets, tend to be cyclical. Moreover, even an advisor who is highly successful over the course of a year may—and probably will—experience some months in which losses are incurred. Thus, while you are free to close an account at any time, it is probably not a prudent investment strategy to establish an account that you do not plan on maintaining for at least a year.

8. How does the performance of managed futures accounts compare with those of self directed accounts?

Some individual investors --- those who have the know-how, time, access to information, and necessary temperament -- are highly successful in directing their own futures trading. Unfortunately, the record suggests that only a small percentage of “do-it-yourself” futures traders possess these requisites for success. Studies indicate that somewhere between two out of three and nine out of ten lose money. However, of the 119 funds and pools in the Managed Account Reports Fund/Pool Qualified Universe Index that traded from January 1990 through October 1996, 81% were profitable over the full time period.

9. Who regulates commodity trading advisors?

They are regulated by the federal Commodity Futures Trading Commission (CFTC) and by the National Futures Association (NFA), the congressionally authorized self-regulatory organization of the futures industry. All trading advisors must be registered with the CFTC and those who manage customer accounts must be members of the NFA. Advisors disclosure documents are required to be submitted to the CFTC for review in advance of distribution to prospective investors. On an ongoing basis, NFA audits disclosure documents (particularly performance information), promotional materials, and trading activities. Violations of CFTC or NFA rules can result in a loss of trading privileges and other penalties.

10. What mistakes do investors sometimes make regarding managed futures accounts?

Three probably top the list:

1. The fact that a managed account approach may be more attractive than a do-it-yourself trading approach doesn't mean futures trading in any form is necessarily appropriate for a given person. Because risk is the constant shadow of the pursuit of profit, it's definitely not appropriate for everyone. Unless you're confident it's appropriate for you, don't invest at all.
2. As already mentioned, choosing an advisor for the wrong reasons can be a costly mistake. Selecting solely on the basis of "who's hot and who's not" usually leads to flawed decisions.
3. Investors prone to "account jumping" frequently jump the wrong way. This doesn't mean the advisor you start with should forever be the advisor you stay with, but it does mean-and the records document it- that accounts maintained over a longer period of time tend to perform appreciably better than accounts that are in short-term parking. That's all the more reason for your initial decision to be carefully considered.

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Disclaimer: *There is a substantial risk of loss in futures trading and is not suitable for everyone.