Managing Risk & Reward - November 2009

As a former derivatives trader and member of the Chicago Board of Options Exchange (CBOE), Chicago Board of Trade (CBOT), and the Chicago Mercantile Exchange (CME), I wanted to offer some insights on how the most powerful organizations in the world are managing risk, reward and tax obligations as compared to the average investor. As our global economy shifts into a new cycle, and America's role as world leader comes into question, savvy investors will adjust to this new environment and should not rely on traditional thinking or risk going the way of the dinosaur - and become extinct.

Traditional thinking tells us to diversify our portfolio between domestic & international stocks, mutual funds, ETFs, real estate, bonds, and money market funds. Traditional thinking tells us to maximize our contributions to IRAs, 401ks, defined benefit plans, profit sharing plans, etc. so we can enjoy our tax deduction today, and take our income out during retirement when we will be in a lower tax bracket...

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