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American Economy Slowing

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By Author: Commodity Strategy
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The U.S. economy added 80,000 jobs in June which is a sign of a slowing economy. Reasons for the slowdown in economic growth can point back to a number of different things. Many companies are not hiring as they wait for the uncertainty around tax increases. The Obama administration has stated that it is necessary to raise the income tax rate for individuals earning more than $250,000 a year. For those earning more than $250,000 a year they are hesitant to venture into new businesses or increase investment in their own. Other factors affecting the growth in the economy are low interest rates and loose monetary policies are now being seen as signs of weakness which in turn are not enticing companies to hire. The slow economic growth is having an effect on the equity markets. As investment portfolios were beginning to grow again we are seeing signs of slow growth and consistent economic bad news from Europe that threatens prosperity here in the U.S. Greece is continually threatening the EU and Spain and Portugal are heading in the same direction. With European politics not fixing their dire situation there is no hope for steady ...
... and consistent growth. Austerity measures that are desperately needed to bring stability to the continent. This is just another reason why investors need diversification in their portfolio. Investors could choose a commodity strategy that could hedge their stock and bond portfolio, for example managed futures. Futures strategycould be the best hedge because it has historically been non-correlated to the equity and bond markets. Another commodity strategy investors could turn to are physical commodities but they do not have the liquidity that a futures strategy does. Managed futures can be a great way for investors with no experience in the futures market to get exposure. A commodity trading company called a CTA (Commodity Trading Advisor) is one type of managed futures account. As a commodity trading company they provide investors with full disclosure documents that outline the manager’s strategy, risk parameters and fees. The CTA also provides investors with a track record which demonstrate the manager’s ability to trade in a different set of market conditions from flat to high volatility to trending. With uncertainty in markets around the world and fears of a double dip recession investors are turning to managed futures to diversify their portfolio and shift their exposure to multiple markets. Managed futures saw a spike in assets under management during 2008. As the stock market was crumbling investors sought out opportunities that could lower volatility in their portfolio. As we see our economy sputter the market strategist at Cedar Asset Management see the need for exposure to an alternative market in investment portfolios. Cedar Asset Management is a guaranteed introducing brokerage that works with investors in choosing the appropriate strategy, risk parameters, and minimum account requirement. The investor also needs to determine what markets they want exposure to. The futures market has expanded so much that it includes equity indices, currencies, and interest rates. If an investor wants adverse exposure to U.S. equity markets they can choose a CTA who trades the U.S. index futures. To get exposure to Europe as a hedge you could choose a CTA who trades currency futures. There are strategies and markets for every investor to fulfill their investment goals and needs.
commodity strategy
futures strategy
Commodity trading companies

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