As Europe enters the second quarter of 2017, it’s already evident that volatility promises to have a substantial impact on the region’s future.
Parliamentary and presidential elections in Holland, France, Germany and Italy are proving divisive, and many have been concerned that populist parties will gain more of a stronghold. Additionally, the financial markets are still in turmoil following the Brexit vote and the jury is still out as to the ultimate impact that will have. At the World Economic Forum in Davos earlier this year, more than 3,000 influential attendees discussed these issues as well as the impact of US President Donald Trump’s victory on global markets.
It’s anyone’s best guess as to what exactly will transpire in Europe for the balance of 2017, but it’s tough to argue the fact that volatility is on the horizon. That said, how can we best capitalize on it, and where can investors find new opportunities and value? Where can investors find new opportunities where opportunistic volatility exists, but that is non-correlated to the ominous shadow growing over both the equities and bond markets?
Fortunately, the harnessing of advanced technology, including artificial intelligence and sophisticated algorithms, was another hot topic at Davos this year as it continues to generate new growth opportunities. When used correctly, and when volatility is taken into consideration, these strategies are an ideal component of a savvy investor’s portfolio. It’s a great time to embrace change and seek top tier managers who understand how to use today’s advanced technology as well as the importance of monitoring world events and adapting accordingly.
In today’s turbulent times, Forex strategies in particular deserve a close look, as they have a unique ability to add value. Traditionally seen as volatile and a high risk market for many inexperienced traders, some strategies have proven to be extremely beneficial when courting the currency markets. As a result of impressive advances in artificial intelligence and algorithmic approaches, Forex trading is growing in popularity, and now represents about $5.3 trillion a day in the markets. It is quite simply the largest market in the world, and strangely, one that many people have likely heard little about. Is it time for an Alternative Class Investment in your portfolio?
Interestingly, elite Forex trading systems are now so advanced that some of them make trading seem straightforward. Mediatrix Capital, for example, utilizes proprietary artificial intelligence and algorithmic approaches that incorporate overlay and absolute return strategies to trade in the FX Spot Markets. The systems can concurrently trade a combination of 34 currency and precious metal pairs by first selecting the highest probability of market direction to yield profitable trades. These and multiple layered distinctive methodologies have proven to achieve stellar returns for over 39 months consistently.
When evaluating asset managers, it’s essential to pay close attention to the risk management systems and methodologies they employ, since risk mitigation is arguably more important than the trading strategy itself. In an effort to minimize losses that may occur in volatile markets, the open positions should be tested frequently using stress tests that indicate the effects of an unusual market situation, and a series of “what if” defensive strategies to combat the black swan event that is always lurking but infrequently occurring.
Additional risk management tools should include an internal compliance protocol implemented for all equity positions taken, limits on every trade so as to pre-determine the possible drawdown (or loss), automated trade execution, automated and algo-based risk controls to minimize potential negative effects of high volatility, a discretionary profit lock-in feature, and an Options Forward Contracts Strategy to reduce or eliminate loss of principal in the event of an unforeseen massive gap move. Strict risk/reward management must be at the absolute core to a proper investment strategy and if an asset manager is utilizing automation within their trading strategy, it should include these functions fully embedded into their macro-investment strategy, and execution.
It won’t be business as usual in Europe in 2017, but that is not necessarily bad news for investors. In volatile times, it is wise to be proactive instead of hunkering down and fearing for the worst. Smart investors understand the need to rely on managers who embrace a flexible, opportunistic investment style combined with strong risk management. Together with the use of advanced technology, this approach positions them to provide investors with high annual returns. Understand that technology is the tool, by which experience can be showcased. Make no mistake, decades of market experience cannot be replaced by technology alone. When combining 40+ years of trading experience with some of the best algorithmic trade strategies, you have a rare opportunity to both seek and obtain Alpha. Fear not the change on the horizon, but find a niche to continue your success.
For further information on Mediatrix Capital, visit www.mediatrixcapital.com or call 1-800-905-1006.
In no event should the content of this material be construed as an advertisement, express or an implied promise, guarantee or implication by or from Mediatrix Capital Inc. (MC) or any of its partner or subsidiary companies. This is not an attempt to sell or solicit any security and should not be taken as such. The content of this document is for informational purposes only. Potential Accredited Investors are advised to carefully read the Disclosure Documents to determine whether a managed investment in MC is consistent with their financial situations and investment objectives. Past results are no guarantee of future performance. Mediatrix Capital is a foreign corporation based in Nassau Bahamas, and does not operate within the United States.