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Bruce:
No, I am not a bean counter. I am a broker. A futures broker. I have no
problem with you or other people trading futures. That is what I do for a
living. But it must be appropriate for the individual. I do not believe
that futures trading is an appropriate vehicle for college savings. Sure
there are exceptions.
Futures trading is something that should fit into the scope of a larger
portfolio. It is something that only risk capital should be used to do.
Most kids saving for college don't have a portfolio that would support taking
on highly leveraged futures market risk. Certainly there are other higher
risk endeavors that would not be appropriate for college savings programs
either.
As for investing in futures, I would suggest a managed futures program; an
individually managed account or a futures fund. Pick something with a proven
track record. And stay away from those using chicanery to make themselves
look like they are more than they really are.
If you want to invest in soybeans, or some other commodity, I would suggest
becoming a farmer or producer. If you are speculating on futures, you are
trading not investing. If you are investing, you are probably carrying a
loser.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it! John J.
Lothian is the President of the Electronic Trading Division of The Price
Futures Group, Inc., an Introducing Broker.
\In a message dated 7/18/01 1:13:01 AM Central Daylight Time,
bruce.larson@xxxxxxxxxxxxx writes:
<< John, you sound like a true bean counter. I keep my money in money
markets and use a small portion (risk capital) to trade. If I want
to own bonds, I can keep the money in a money market account and buy
bond futures. In fact I can leverage at the implied repo rate which
is far lower than my money market account return. The futures market
is far more liquid than trying to buy/sell cash bonds through a
broker. The bid/offer is tighter, the commissions are far cheaper
and I can pretty much guarantee myself instat fills. You may think
futures is inappropriate as an investment vehicle but there are valid
reasons which make it far safer than certain cash instruments such as
tech stocks. >>
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