In my last article Four Key Items for an Emerging Manager to Grow Their Business, was a discussion about track records. This article discusses it in more detail. Investors often ask for at least a three to five year track record. Emerging managers, may ask why do I need to have that long of a track record? There are a few reasons for the length.
- It shows if there is any consistency to the manager’s trading and environments where they profited and lost.
- More importantly it gives an investor enough monthly data to calculate various metrics on the trading system to begin a profile of the investment.
- From an organizational perspective, the longer track record implies the manager has been in business longer and if they are effective at running a business.
A very important metric that is sometimes forgotten or less emphasized is the READ MORE
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Copyright ©2014 Mark Shore. Contact Mark Shore for permission for republication at firstname.lastname@example.org Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com
Mark Shore is also an Adjunct Professor at DePaul University’s Kellstadt Graduate School of Business, where he teaches the only known accredited managed futures course in the country. He is also a Board Member of the Arditti Center for Risk Management at DePaul University.
Past performance is not necessarily indicative of future results. Only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.