There's no single reason. High on the list, is "Low Correlation"; ie: Managed Futures Investments may perform best when other investments are performing relatively poorly. As Harvard's Lintner reported, "the correlation between the returns on futures portfolios and those in the stock and bond portfolios (is) …surprisingly low and sometimes negative".

Everyday Tens of Thousands of people attempt to make money trading the Commodity Markets. Yet there are only a very select few who actually do make money.

The Professional CTA Versus the Individual Amateur:    Studies show that a majority of amateurs who trade futures on their own do lose. However, there is a logical reason for the amateur's losses. If a non - professional attempted to practice medicine or law, he or she probably would perform quite poorly, similar to many NON - professional futures traders.

From monitoring amateurs who trade futures on their own, we have observed most trade on rumors, tips from friends, gut feelings, part-time research, and for the fun of it. We believe most amateurs who trade futures on their own are making a very serious error. They are not professionals and, in our opinion, are doomed to fail even before they begin, just like a non - professional would be if he or she attempted a complicated medical operation.

In most professions, there is a vast difference in performance between amateurs and professionals. This is especially applicable to futures trading.

Doesn't it stand to reason that successful futures trading requires full - time professional preparation, participation, study, focus, and natural aptitude? It should be no surprise that in the highly complex and challenging field of commodity futures trading that the vast majority of non - professional amateurs do lose. Studies show that as much as 90% of these "do it yourself" amateurs are not profitable trading futures on their own.

Now consider a study where performance of 363 Professional CTA's were tracked over three - and - a - half years (from 1990 through mid 1993): At the end, 94% were profitable. (Please be advised that this study didn't represent the entire universe of CTAs. Other groups of CTAs may have had better or worse results.) Reference: Chicago Mercantile Exchange (CME), brochure #M584/50M/1193, "A Question and Answer Report on Managed Futures Accounts" (p. 7).

A Professionally Managed Futures Account is one where a registered Commodity Trading Advisor (CTA) is given responsibility to make all trading decisions.

By investing in a Professionally Managed Futures Account, you don't have to think about or worry about market timing, asset selection, stop loss and profit points, portfolio allocation, etc.

You have hired a Professional Trader (CTA) after reviewing his/her Disclosure Document.  Also, you are employing Iowa Capital Management, Inc. to oversee your account(s) and make recommendations to you as necessary.

The additional beauty of this flexible approach is that you no longer have to depend solely on the stock market or its upward movement to make decent returns. Since our CTAs have the ability to go both long and short a market, we really don't care whether the respective market is going up or down.

The CTA(s) you choose will only have a limited trading authorization over your account, which means they can only place buy and sell orders. The account is legally secure because we cannot take money out of your account without your approval. These accounts may be suitable for your risk capital, or even IRA capital, and should be viewed as long-term investments.

There is a category of Professional Futures Trader called "Commodity Trading Advisor" (CTA). Today, August 2002 there are about 800 people who hold the designation "CTA". You, as a private investor, can hire these people. Before you do, you must receive a "Disclosure Document" which outlines who this CTA is, what he/she does, how they do it and most importantly HOW THEY HAVE DONE IN REAL TIME WITH REAL MONEY.  Armed with this information, if you can qualify, you can choose to hire a CTA, or a portfolio of CTAs, to work for you.

Iowa Capital Management, Inc.'s business is:

• To research these CTAs, and
• Match" them to investors like yourself, and
• Continuously monitor these CTAs on your behalf.

In other words, we select what we believe are the best, then see if they will "Compliment" your goals and your temperament. Finally, we observe these CTAs on a daily basis and maintain contact with you on your portfolio.

No. Futures markets, like most markets, tend to be cyclical. Moreover, even a CTA who is highly successful over the course of a year may - and probably will - experience some months in which losses are incurred. Thus, while you are free to close an account at any time, it's probably not a prudent investment strategy to establish an account that you don't plan to maintain for at least two or three years. 

There is no method of futures trading that doesn't involve risk. The same leverage and price movements that can produce trading profits can produce trading losses. Indeed, any loss that can occur, can also occur in a Professionally Managed Futures Account.

Having said this, however, one of the things that should obviously be looked for in a Commodity Trading Advisor (CTA) is a long - term demonstrated ability to manage risks and recover from periods of loss.

The growing complexity of the markets is one factor but by no means the only factor. As in most areas of investment, trading experience and trading skills are ultimately major determinants of trading success. Profitable futures trading requires the discipline and temperament to respond to market realities if and when they conflict with market expectations. It requires a keen knowledge of when and how to liquidate them. It requires the development and implementation of carefully considered trading strategies - a trading plan and a trading system.

A study by Harvard Business School professor John E. Lintner found that including futures in an investment portfolio "reduces volatility while enhancing return". And that such portfolios "have substantially less risk at every possible level of return than portfolios of only stocks or only stocks and bonds".

A similar analysis by Managed Accounts Reports, a firm that tracks investment performance, found that portfolios with as much as 20% of assets in Managed Futures yielded up to 50% more than stock and bond portfolios having comparable risk.

A study published in The Wall Street Journal on December 10, 1990, showed how the addition of Managed Futures to a conventional portfolio of stocks, bonds, and Treasury bills increased return and reduced overall risk. The conventional portfolio had a five - year average annual return of 11.6% and a maximum drawdown of 6.2%. With Managed Futures included, overall portfolio return was increased to 14.4% and the maximum drawdown was only 4.9%. It should not be assumed all portfolios including Managed Futures Accounts have had - or will have - the same or similar results. Investment performance is influenced by the structure of the portfolio, market conditions and the success of the trading advisor.

In order for this to be a good investment for you there are three things that have to be "matched".

• The Amount of Money necessary - Every CTA has different minimum required amounts based on how and what they trade.
• The Potential Returns must be attractive to you.
• The Volatility or risk must be tolerable to you.

At Iowa Capital Management, Inc. all three are vitally important. We don't want to place you with a CTA who will make you money and - at the same time - give you intolerable "discomfort".

So, we take you through a process of disclosing both the "Good News" and the "Bad News" about each CTA so you can clearly understand whether this CTA is a good "fit" or "match" for your pocketbook, your personality and your objectives.

If the fit is perceived by you to be a good one, we then set you up with a "Professionally Managed Futures Account".

Only risk capital should be used in Managed Futures or any speculative investment. We recommend the amount you invest should depend on your own individual preferences; usually 5 to 25% of your overall portfolio depending on your funds, goals, and temperament.

Minimums? Yes, but different Managed Account Programs have different minimums. At the least, it will be an amount the advisor and brokerage firm - given the trading approach utilized - consider adequate to achieve account diversification.

Your funds are available on a few days notice.  In most cases your funds can be wired to you within one or two days, if you wish.

You will be getting a statement directly from the brokerage firm every time there is a new buy or sell activity in your account. You will also be getting a monthly statement so that you can see your net gain or loss for the month and your account balance.

You will be provided the same timely reports you'd receive if you were trading your own account. This includes immediate mailed, or if you wish emailed, reports of all purchases and sales, and a month-end summary of transactions, gains, losses, open positions, and current account value. Iowa Capital Management, Inc. will, of course, have the same information, updated daily. You may call us any day toll free at 800-844-5188 to obtain an up-to-date status on your account(s).  We can also arrange free access to your account via the internet if you wish.

When you are trading your own account, you are limited to your trading system and style. By diversifying with CTA's you are, in effect, constructing a diversified CTAs portfolio of your own. There are numerous top-performing CTA's who have Managed Accounts with other CTA's. Past Performance is not necessarily indicative of future results. The risk of loss exists in futures trading.

They are regulated by the federal Commodity Futures Trading Commission (CFTC) and by the National Futures Association (NFA), the congressionally authorized self - regulatory organization of the futures industry. All Commodity Trading Advisors (CTAs) must be registered with the CFTC and those who manage customer accounts must be members of NFA.

You can verify an advisor's registration and NFA membership by phoning NFA toll free 1-800-621-3570. NFA also offers without charge, a number of informative publications regarding its regulatory activities and futures trading. You can also access NFA information at www.nfa.futures.org.

Three probably top the list.

First, even though a Managed Futures Account approach may be more attractive than a do-it yourself trading approach it doesn't mean futures trading in any form is necessarily appropriate for a given person. Because risk is the constant shadow of the pursuit of profit, it's definitely not appropriate for everyone. Unless you're confident it's appropriate for you, don't invest at all.

Second, choosing a CTA for the wrong reasons can be a costly mistake. Selecting solely on the basis of "who's hot and who's not" usually leads to flawed decisions.

If you decide futures trading is an appropriate investment for you, please give careful thought to the advantages of the Managed Futures Account approach. Also, you need to choose your Commodity Trading Advisor (CTA) with considerable care. For the right investor, teamed with the right CTAs, today's futures markets are providing increasingly attractive and diverse investment opportunities.

For more information call us at 1-800-844-5188.