Polar Investment Counsel, Inc.

Independent Securities & Futures Brokers

Member: FINRA, NFA, MSRB, SIPC


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Alternative Investing

Wise investments are usually made by few and are usually safer than broadly accepted investments, partially at least because their price does not reflect popularity.

The firm is of the opinion that our customers are usually best served through the use of some appropriate combination of professional money management tools and alternative investments.  To that end, the firm has several professionally managed internal products such as individually managed futures accounts, institutional fixed income management, and so forth.  In addition, we maintain relationships with outside management firms and alternative investment firms.

 

Many of these programs emphasize what we like to call non-traditional asset management.  That is to say, investment opportunities which offer the client an opportunity of profiting in the face of declining stock and bond markets, the "traditional investment" category.  Such programs as an investment in rare coins, an investment in an equipment leasing program, a real estate partnership of some sort, or perhaps a futures trading program.   As the need for storage of technology increases, data centers are needed (aka: "the cloud") and we have several offerings that contain prime long termed leases on such centers. 

 

We are partial to the managed futures programs.  Some years ago, it was true that these sorts of programs were not readily available to the average investor, but rather were a vehicle used by the more affluent investor.  However, times have changed.  In the early 1970's a very few managed futures programs (and individually managed accounts) were being used as a management tool by a very few brokerage houses.  Gradually, over the years that number grew.  However, even today, this opportunity is perhaps one of the best kept secrets of the investment world because although it has been available for some time, most financial professionals and brokerage firms do not utilize managed futures accounts to any degree.  The stellar performance of the American equities markets of the eighties and nineties gave rise to little need of examining so called alternative investments.  Additionally, this has not always been a large market, organizations which track such data estimate that at the end of 2002, global investments in managed futures programs amounted to just over forty billion dollars.  This figure is pale in comparison to say the customer assets invested in just the fidelity fund family (over one trillion dollars).  Perhaps this explains why a client may never have heard the term "managed futures". 

 

Extensive research has demonstrated that these programs have the ability to profit in any economic or market environment, and that the addition of managed futures programs into traditional investment portfolios actually reduced volatility and enhanced returns.  Why not see what the CME Group has to say: Managed Futures.

 

The firm offers a wide array of these programs, hence we are able to locate something suitable and affordable for any client wishing to participate.  Actual offerings of our various programs are made only by disclosure document.  Please ask your investment professional for further information on a program or programs which may be suitable in your situation.  Naturally all of the firm's professional associates do not have expertise in this area, but they are all able to refer a client to someone who does.  We believe this is an opportunity each investor needs to evaluate.

 

All of that said, today's regulatory environment obliges us to point out the following with regard to managed futures programs:

  • such an investment is speculative in nature and may involve a high degree of risk

  • an investor could lose a substantial portion or all of their investment

  • such an investment should be discretionary capital, set aside for speculative investments

  • these programs are not suitable for all investors

  • some programs may be leveraged making performance more volatile

  • some programs may use a single advisor, or employ a single strategy (or both) which may mean a lack of diversification and consequently higher risk

  • some programs may execute a substantial portion of transactions on foreign exchanges, which could mean higher risk

  • an investment in some of these programs may be illiquid (and without any secondary market) and there are significant restrictions on transferring such investments

  • there is no secondary market for investments in most of these programs and none is expected to develop

  • a programs fees and expenses may be substantial and perhaps with no offsetting investment return

  • some programs may involve complex tax structures and consequently delays in distributing important tax information

The above may not represent a complete list of all risks.  More complete disclosures are contained in each program's offering document, which must be reviewed carefully.

 

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