There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks tha

Stock investor and author Ken Fisher thinks so. In his new book The Only Three Questions That Count, Fisher preaches against listening to the gaggle of grousers who complain that the United States is on the verge of monetary self-immolation.

Instead, Fisher uses the collective voices as a kind of technical indicator: loud, shrill cautionary declarations mean buy, buy, buy.

Boiled down, the message Fisher and Forbes publisher Rich Karlgaard, whose column in the January 29, 2007 issues of his magazine features Fisher’s book, may be this: Don’t listen to what might happen. Watch what the markets are actually doing.

Fisher and Karlgaard may have good reason to crow, if the record highs in the Dow Jones Index mean anything. In spite of growing deficits and a bloated war budget the stock market closed strong in 2006 and has started the New Year in fine style. Who can argue with success?

Me.

I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks that

Instead, Fisher uses the collective voices as a kind of technical indicator: loud, shrill cautionary declarations mean buy, buy, buy.

Boiled down, the message Fisher and Forbes publisher Rich Karlgaard, whose column in the January 29, 2007 issues of his magazine features Fisher’s book, may be this: Don’t listen to what might happen. Watch what the markets are actually doing.

Fisher and Karlgaard may have good reason to crow, if the record highs in the Dow Jones Index mean anything. In spite of growing deficits and a bloated war budget the stock market closed strong in 2006 and has started the New Year in fine style. Who can argue with success?

Me.

I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks tha

Fisher and Karlgaard may have good reason to crow, if the record highs in the Dow Jones Index mean anything. In spite of growing deficits and a bloated war budget the stock market closed strong in 2006 and has started the New Year in fine style. Who can argue with success?

Me.

I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks tha

I too believe it makes more sense to watch the behavior of price rather than be influenced by the opinions of market sages.

But what are long-term investors to do when dramatic events suddenly reverse market gains? Resist panic, yes. Yet the tech stock downturn in 2000 is a bitter reminder of the inherent risk in stubborn buy-and-hold strategies.

There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks tha

There is a method of investing that allows you to enjoy the long-term gains of a trending market, while at the same time having the flexibility to liquidate short-term positions without serious tax liabilities. (If you buy and sell a stock within 12 months you’ll be taxed at a higher rate than those stocks that are liquidated after a year or more of ownership.)

The method I’m referring to is managed futures.

Managed futures are not new. Investment managers have been using managed futures for more than 30 years to diversify and stabilize portfolios. In recent years, this practice has spread to pension funds, endowments, trusts and banks.

Managed futures have grown as portfolio managers have become more acquainted with futures contracts. Also, investors have insisted on greater access to world markets, with more exposure to non-financial sectors, such as agriculture and precious metals.

It is estimated that managed futures reached about $150 billion in the second quarter of 2006 – a 17.62% increase in assets over the previous 12 months. One reason for this incredible growth is independent studies that show managed futures offer far too many benefits for wise investors to ignore:

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Reduced portfolio volatility risk
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Possible enhanced portfolio returns
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Opportunity for gains in any economic environment – and “hard” times are often very good for commodities
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Easy access to global markets

Perhaps one of the most significant studies of managed futures was released in 2004 by the Yale International Center for Finance. Authors Gary Gorton and K. Geert Rouwenhorst wrote Facts and Fantasies About Commodit