Managed Futures? Average 15% returns and 4 times leverage?

[Greg P.]

Hello, I have a trustworthy friend of mine who presented a opportunity. Basically, he is apart of a hedge fund who has a 10 year history of producing 15% average returns in managed futures. He said that if I invested 250k, I could leverage it like it was 1mil then make the 15% off the 1mil. The same apply when losing money. This company supposedly has been around for over 10 years and is only for "qualified" aka high net worth individuals. If I do the math on my 250k, I would make more than 120k/year which is a 40%+ return on my money. Sounds too good to be true, but I'm wondering if anyone has heard of this type of thing? Thank you.

[Andy M.]

Greg, I traded futures for a while and had some great years. I won most of the time (11/12 months mostly). Trouble came when that 1/12 months really really hit hard. I'm not going to give the long story here but suffice it to say that risk reward is very real. If you have leverage help you make good returns be prepared for it to swing back as well. There is still no easy money.

Even though I know the returns you are talking about are possible (I experienced it for years) I still decided that ultimately it wasn't worth it. I no longer trade futures at all. Not even a small portion of my money. Just .02 from someone who has been there.