Outlook

Grain trade alert issued for clients 2005,

participate as we attempt to anticipate future trends.

Growing wage pressure may reduce productivity and increase costs. Low interest rates relative to inflation hurts the US dollar.

The path of least resistance is to pay back debt with ever cheaper currency. A weaker dollar leads to inflation.

Global interest rates have risen. While flights to safety can temporarily lift local treasury prices at the end of the day why would anyone buy Treasuries if the currency decline is greater then the interest paid? To attract capital to fund the budget deficit, and keep any decline in the US dollar orderly, interest rates may need two legs up for every leg down.

A downward spiral could develop where lower bond prices make the alternative of investing in equities less attractive and lower equities make bonds less attractive. Equity valuations were well above historic averages that include bubble peaks. As it becomes harder to raise capital via debt issuance the supply of stock should increase via reduced buy backs and greater issuance. At the same time demand may diminish as aging 'baby boomers' becoming net asset sellers. Threatened trade sanctions due to unfair competition, or higher taxes, could also increase costs, slow corporate earnings and reduce foreign bank reinvestment in the US. This all leads to a real risk of sustained declines in the US dollar, bond, and equity markets. The Pearlman CTA managed futures program hopes to protect against, by profiting from, any declines in the financial markets.

A weaker US dollar, growth straining capacity, higher energy, rising labor costs, and slowing productivity, traditionally result in commodity price inflation. Decades of world wealth and demand growth, a finite commodity supply, and low carrying costs are also bullish for commodity prices. The Pearlman CTA managed futures program also hopes to capitalize from higher commodity prices.

Gold has been a good alternative to the US $. Some commodities are sensitive to economic strength. Some commodities in hindsight will be known to have been better values then others. Keeping an informed, reasonable outlook is only a part of what is needed to maximize the chance of success. The why futures, why managed futures, and why Pearlman CTA pages explain why this program may have as good or better chance of success then the myriad of alternatives.

Each professional CTA is unique. It is prudent to choose a Commodity Trading Advisor who can position and manage an account for you to prepare for pending events. Pearlman CTA managed futures programs have the potential to do well in good and bad economic scenarios, positioning clients for potential profits while attempting to hedge some financial risk.

As with all investments past performance is not always indicative of future results.