Last year we observed that a host of commodity markets were rallying (see our post on cotton markets). At the time, commentators weren’t predicting the rapid world changes that the last six months have delivered. Globally, inflation is in the high single digits, commodity prices have soared, bond markets crashed, equities have dramatically corrected, and the risk of recession is increasing.

ECCM’s systems were already positioned for these moves in October 2021. That’s the power of systematic investing – participating in large market moves without having to predict or explain why, and avoiding negative left tail risks, which some (many) investors have paid dearly for in bond and equity markets.

At ECCM, 100% of our trading is systematic. We see the value in systematic trading through the cycle, and a substantial allocation to this investment style is especially valuable in challenging market environments, when it’s not necessarily obvious that traditional asset classes will deliver wealth creation.

#investing #finance #futures #trendfollowing #trading #systematictrading #diversification #alternativeassets

Although there is an abundance of press about bonds, equities and property, it’s much harder to find commentary about less readily accessible financial instruments. The ABC reported recently that cotton prices have reached decade-highs and provided some views as to why (https://www.abc.net.au/news/2021-10-09/cotton-prices-soar-for-australian-growers/100520118).

What’s far more interesting to us at ECCM is that cotton is one of the many commodities products we trade, providing our clients with access to investing in what has been a strongly trending market. We believe in the value of having a diversified portfolio, including across assets that many investors would not normally be able to invest in.

#investing #finance #futures #trendfollowing #trading #systematictrading #diversification #alternativeassets