What mistakes do investors sometimes make regarding managed futures accounts?
A. Three probably top the list. First, 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. Second, 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. Third, investors prone to “account jumping” frequently jump the wrong way. This doesn’t mean the advisor your 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
