'Financial Tylenol' for wealthy investors
Managed futures are risky, but good performers in this economy
One type of alternative investment, managed futures, has actually done pretty well.
Managed futures focus on futures contracts, and are run on computer models, reports The New York Times. They can be customized for either a long or short strategy.
They're risky, which is why the Securities and Exchange Commission doesn't let you in on them unless you have at least a $1 million net worth, the Times reports.
And if you really want to diversify, managed futures might be a good bet because they tend to respond differently than stocks and bonds.
“Managed futures tend to do well during periods of great market volatility,” the chief investment strategist of Morgan Stanley Smith Barney told the Times. “I call them financial Tylenol.”
He recommends that investors give about 4% of their portfolio to managed futures.
And people that have done that over the past two years are very happy they did. Managed futures are up about 20% during that time.
But in addition to being risky, managed futures are also pricey, with higher fees associated than you might find with other investments.
For more on managed futures, check out this Investopedia writeup.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.