How CAMS-Managed Accounts Work
Although this service is not set up as a Hedge Fund, dozens of trading instruments are available, depending on the net worth of the individual client. Each client has a separate account that is established with an international broker-dealer whose only interest is in collecting small commissions on trading activities. Your account assets can be accessed only by you. Your money is not mixed with others' money and receives separate accounting for daily statements and for income tax reporting. If you already have an account somewhere else, you may keep it there if it allows online automated trading, however trading choices may be very limited due to a narrow trading menu for that firm. The manager's role is make the trading decisions for your account. He simply looks for likely places to make money for you each day and trades whatever market appears to present that opportunity, whether a stock, option, ETF (no mutual funds are used), FOREX or futures contract. Chances are... the manager's decisions will be better than yours. That's why you pay the management fees.
All that matters is whether the manager makes money for you, regardless of how he does it. There is ALWAYS the possibility of LOSS if you have your money in any securities market (stock, bonds, mutual funds, futures, currencies, options, etc.), no matter who is managing it. For whatever reason, people and institutions foolishly put their money into the hands of people who have the power to actually SPEND or steal their money. Doing that requires "trust," but obviously, not everyone is trustworthy. Thus we get the horror reports in the news. In the CAMS system, "trust" is not relevant because the manager cannot spend or steal your money. He can only control how your money is traded inside of your account. That reality requires his use of "judgment," not your exercise of "trust." You are protected from theft or any other form of misappropriation of your money. Success or failure inside of your account is subject to the manager's judgment and ongoing market conditions.
People naturally like to think that they are "trusting" a manager with their money. Sorry, but it doesn't work that way here. To "trust" implies that whomever you are trusting has both personal control of your money AND that he controls a predictable outcome. Unfortunately, there is no way to predict an outcome in the markets. You SHOULD be able to trust a doctor or a CPA, for example, because they control a body of truth that contains highly predictable outcomes for your health or for your tax return, IF they follow pre-determined procedures. But in the securities world, a very large contest of competing forces unfolds around the clock in which absolutely no one knows what will happen in the next five minutes. To apply "trust" to such an activity is inappropriate...and some even call it "insane."
In the CAMS system, you delegate decision-making, but you NEVER give up control. You may withdraw money or terminate the CAMS management of your account at any time and do whatever you wish with your account balance.
THE MANAGEMENT FEES: Part I: 4% annually in advance based on new money deposited and then 4% of the account value each year thereafter for as long as you remain a client. Part II: 80-20 split of new profits deducted quarterly. For every five dollars of new profits at the end of each quarter, I deduct one dollar as a performance bonus and you keep the other four. In order for the manager to receive future bonuses, your account must be larger than it was at the time of the previous bonus. If it isn't, no bonus is earned.
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