Market stability is an evolutionary process where each crisis acts as a learning event. The 2008 crash taught policymakers how to respond with tools like credit facilities, enabling a much faster, more effective response to the COVID-19 shock. Crises are not just failures but necessary reps that improve systemic resilience.

Unlike typical investors who chase performance, sophisticated institutions often rebalance into managed futures when the strategy is in a drawdown. They take profits after strong years (like 2022) and re-allocate capital during weak periods to maintain strategic exposure.

The most profitable periods for trend following occur when market trends extend far beyond what seems rational or fundamentally justified. The strategy is designed to stay disciplined as prices move to levels few can imagine, long after others have exited.

Conventional definitions of risk, like volatility, are flawed. True risk is an event you did not anticipate that forces you to abandon your strategy at a bad time. Foreseeable events, like a 50% market crash, are not risks but rather expected parts of the market cycle that a robust strategy should be built to withstand.

During profound economic instability, the winning strategy isn't chasing the highest returns, but rather avoiding catastrophic loss. The greatest risks are not missed upside, but holding only cash as inflation erodes its value or relying solely on a paycheck.

Simple replication of managed futures indices is slow and has high tracking error. A superior “informed replication” approach combines backward-looking index data with forward-looking trend system priors and active risk management, resulting in a more robust beta-like exposure.

Unlike the 2008 crisis, which was concentrated in housing and banking, today's risk is an 'everything bubble.' A decade of cheap money has simultaneously inflated stocks, real estate, crypto, and even collectibles, meaning a collapse would be far broader and more contagious.

Combining managed futures with equities in a single product makes the strategy easier for investors to hold behaviorally. However, this “smoother ride” comes at a cost: it dilutes the powerful, anti-correlated impact that a pure-play managed futures strategy can have during a significant market downturn.

Contrary to expectations, drawdowns in managed futures frequently occur when equity markets are performing well. The strategy's recovery periods, however, often coincide with equity market turbulence, highlighting its counter-cyclical nature and making it behaviorally difficult to hold.