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As Ceos Run For Cover Commodity Trading Companies Are Adjusting Their Futures Strategy For New Econo
Jamie Dimon, the CEO of J.P Morgan Chase, was interviewed in India a few weeks back. He mentioned the steps he is taking in the event the U.S. economy slips into another recession. He also mentioned that 80 other CEOs he has spoken with at major U.S corporations are doing the same. They are taking steps to protect their companies and shareholders in the event the fiscal crisis is not averted and we fall into a recession once again. Dimon stated that these companies along with J.P Morgan Chase have stopped hiring and are being more cautious in their business activities. These companies are being affected by policy in Washington and believe it or not are having a large impact on the recovery from the last recession. Banks are being blamed now for not taking any risk in their lending practices, which is not allowing businesses to expand and hire. This is affecting job growth and the politicians in Washington are not doing anything to reassure these CEOs that we are on the right track to responsibly handling our national debt. With no confidence in Washington companies are not going to take the necessary risks to create jobs and ...
... economic growth.
With our debt growing every day and no policy in sight to deal with it American companies are preparing for the worst. As this happens commodity trading companies are now taking positions and implementing a futures strategy to profit in the event of a decline in prices. This commodity strategy is a sign that Washington needs to work together, Democrats and Republicans, to figure out a solution. Without confidence in the financial stability of the largest economy in the world companies will not expand here and will not hire, thus not creating jobs and lowing employments which in turn does not create economic growth. Without economic growth tax revenue for the Federal government will not increase and we will continue to run a deficit and add to our debt. The federal government needs to restore confidence and I believe it is the lack of confidence in our elected official that is halting the economy from growing. I don’t believe it is the effects of spending and tax policy that are going to affect growth but the no knowing.
Commodity trading companies can take advantage of the not knowing with a futures strategy that goes short on the equity indexes. This commodity strategy can use futures or option on futures to profit from a decline in the stock market. Investors who do not trade the futures markets but have a stock and bond portfolio should look into managed futures. Managed futures allow investors without time or experience to take advantage of the non-correlated market and diversify in the event there is another downturn in U.S stocks. In 2008 when the S&P 500 was down about 50% managed futures returned about 35%. By diversifying into managed futures investors had a lower drawdown in their portfolio and will most likely experience higher returns in the long term without having to play the stock market and worry where the economy is going. For more details visit http://www.cedarassetmanagementllc.com/
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