In reality, it is still a trader's market and most of you are not traders. Buy and Hold is dead at least for now.

Over the last ten years, the inflation adjusted return on the S&P 500 was negative 17%. If you include dividends, the inflation-adjusted return was minus 2%.

My firm belief is that we are currently in the middle of a secular bear market and this is not something many of us have ever actually experienced but statistics of history tell us that within secular bear markets there will be rallies the like of which are not seen even during the raging bull years.

In 2010;

By early February the DJIA was down 6%, it then rallied 13% almost to the end of April before falling another 13% in early July, and so it continued, up in early August, down by the end of September, where it rallied again to the end of the year.

But I ask you, do we really need volatility and the associated sleepless nights like this to make sensible returns? Or should I say, could we make a lot more money by having the volatility work for us?

Two ideas from me sum up my advised approach in 2011.

Let's look at some examples;

 

Tulip Trend made more than 37% in 2010 (up to and including November) and is available in EUR, USD, JPY, CHF, GBP and AUD. Thanks to effective currency hedging all classes performed broadly at that level. Minimum investment is the currency equivalent of USD100,000 but you need to show me you are an 'experienced investor' before getting involved. Hit the reply button or email me here for details of how to qualify

 

IQS Performance Fund is rather more volatile but also returned a little over 37% up to end November in 2010. Minimum investment is USD50,000. Click this link for more information

 

For lower volatility I suggest Dighton MSP which is a fund of CTA funds and targets +20% annualised performance with volatility as low as 15%, quite probably the lowest in the space. As of end October this strategy was +17%. Minumum investment is USD50,000. Click this link for more information

 

If you are into the big names then they come no bigger in this class than Eckhardt Trading Company but sadly a direct investment in this fund is out of reach for many of us so the APM Global Trend fund offers access at a paltry USD10,000. 2010 for the fund saw returns of 15.2% as at end November from launch in march 2010. The underlying investment fund shows average annualised growth of 17.7% per annum since inception in late 1991. Click here for more details

 

Alternative Investment Funds.

(These funds tend to just go up every month)

 

Axiom Legal Financing Fund is a capital protected, open-ended fund that provides short term loans to UK law firms who work on a no-win, no-fee basis. In Sterling the fund is +11.48% over 12 months. Available also now in USD and EUR classes. Minimum investment GBP25,000/USD40,000/EUR30,000. Click here to see more

 

New Earth Solutions invests in Waste Recycling Facilities in the UK and in the development of such facilities. This is defined as the processing and treatment of waste, including the recycling of waste, the treatment of waste and the preparation of waste for conversion of waste to energy by any means. Sterling class is +11.29% over 1 year. Minumum investment is GFP10,000. Click here to see details

 

LM Managed Performance is a fixed rate Australian Mortgage Income Fund. You choose your term of 12, 24 or 36 months and any currency from AUD, USD, GBP, EUR, SGD, JPY, CAD, NZD, HKD, CHF, THB, TRY and ZAR. Current rates sample for 36 months are AUD - 9.5% per annum; USD - 7% per annum; GBP - 9% per annum: ZAR - 15% per annum. Click here for details

 

If you are happy with a longer lock up then Secure Capital offers fixed rates for 5, 7 or 10 years from 6% per annum to 9% per annum with income payable annually or quarterly or indeed, compounded annually. Click here for details

 

The Argyle Funds are income producing funds that offer capital protection in three different currencies. The Funds also provide a variety of investment term options (three year and five year) along with a return commensurate with the investment term (three year - 7.5% per annum and five year - 9.5% per annum). Available in USD, EUR and CAD at USD50,000 or currency equivalent. Click here to see more