With a managed account, will I have market positions at all, or nearly all times?
This is another way trading advisors can differ in their investment approach. Some believe the most profitable way to capture the price movements inherent in volatile markets is to maintain continuous but changing market positions. And their trading systems are designed accordingly. Others commit capital to the markets only when there is reasonable confirmation of significant longer term price trends. In the absence of such trends, or under certain other market conditions, the advisor may temporarily elect to remain “market neutral.” This is not to suggest that either approach is necessarily better, only that they are different.
A. There is another way advisors can differ in their investment approach. Some believe the more profitable way to catch the price movements inherent in volatile markets is to maintain continuous but changing market positions. And their trading systems are designed accordingly. Others commit capital to the markets only when there is a reasonable confirmation of significant longer-term price trends. In the absence of such trends, or under certain other market conditions, the advisor may temporarily elect to remain “market neutral.” This is not to suggest that either approach is necessarily better, only that they are different. Which to choose may depend on your own investment temperament and the capabilities of a particular advisor.
