Traditional IRA and 401(k) plans invest in stock market funds, and may not provide adequate diversification or protection.
Traditional 401(k) and ira plans may be at Risk!
Retirement plans are traditionally invested in stock market funds. Peter Orszag, head of the Congressional Budget Office, reported to the Committee on Education and Labor on Oct. 7th, 2008 that retirement funds may have suffered losses of 20% or $2 trillion in the last 15 months due to the current financial crisis. The market recovery period could last longer than anticipated. "The current volatility in the credit markets has spawned a weakened economic climate (including a recession) that will last through late 2010", according to Dr. Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. That said, your retirement plan may not recover in time for you to retire and now may be an excellent time to consider investing in managed futures.
With practically a zero correlation with stocks, one of the most attractive features of managed futures is its ability to add diversification to an overall investment portfolio. This has been substantiated by an extensive bank of academic research, beginning with the landmark study by Dr. John Lintner of Harvard University in which he wrote:
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