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Dave Says: Questionable Investment

by | Apr. 12, 2011

Finances

Dear Dave,

My broker has recommended a managed futures fund. I’ve never heard of these, and I got the feeling she doesn’t know much about them, either. She’s always been very conservative and reliable before, so we’re concerned. Can you explain something about them?

Krista

Dear Krista,

It sounds a little like she jumped off the cliff and became a roulette dealer. The term “managed futures” is virtually an oxymoron. I think she needs to explain her behavior and the investment after this stunt!

With managed futures you’re basically betting on the future price of a commodity. What’s the price of gold, or oil, or wheat going to be somewhere down the road? You’re guessing as to what the future will bring, and managing a group of those guesses. What a joke!

People in the brokerage business represent dumb things every day. The sad thing is this is someone you thought you could trust.

—Dave

* For more financial help please visit daveramsey.com.
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