Frequently Asked Questions

Frequently Asked Questions (F.A.Q.)

Below is a large compiled list of questions submitted to us by some of our prospective clients. Please take the time to read through this, as we are sure many of your queries may be addressed here. We have answered a lot of questions so far. But that is fine, we actually hold to the somewhat outmoded belief that the best investor is an informed one. If you still have a question that you can’t find being answered below, please do not hesitate to contact us at any time.

1. What are alternative investments, and why would I add these to my portfolio?
For a detailed description on alternative investments, including Forex investments, please read this page.

2. What is "Forex" and why is this an ideal asset class for diversification?
For a detailed description on forex please read this page. Our belief with the Forex market is that money is never really made nor lost, but only changes wallets. Diversifying heavily into one major asset class such as Forex, is in our view, one of the few markets that will work with this type of diversification strategy. Strategy diversification is important from one trader to another to take advantage of this concept. However, currency markets are unique in that they are the only asset class that has never experienced an across-the-board bear market, or even a boom or bust like real-estate markets. In our collective opinion, it is as close to “crash-proof” investing as one can come. This makes currencies a unique asset class for a diversification. When one trader is down, another is up. Experienced traders can always find a profitable trend to ride somewhere in the foreign exchange markets, as long as they completely understand the key factors that move world currencies.

3. What is a managed forex account, what are the benefits they provide, and how is a typical managed account traded? For a detailed description on managed forex accounts, please read this page.

4. What is available to satisfy my due diligence before I invest in one of your featured investments? Please read through each featured investment's profile page. We have included as much information as possible to allow a prospective investor to make an informed decision. All performance figures are clearly stated as either forward tested, live real money, demo, or back tested results so as to not be misleading, and all live accounts are now audited by a 3rd party CPA in the USA.

5. Surely to generate above average returns, there is great risk involved. Is this correct? Yes! Because our featured investments are Alternative Investments (focused primarily in the Foreign Exchange market), they carry a high level of risk and may not be suitable for all types of investors (please see our Risk Disclaimer). We believe the key to a successful investment is exposure to enough risk to generate a decent return, but not so much as to give rise to sleepless nights. A disciplined approach restricts the risk and reduces the exposure to volatility in the marketplace. We have chosen our featured investments which have reduced the risk as much as we can possibly see fit, while still targeting consistent and above average returns. Rest assured though - the risk is still present! So do not use money that your family needs, or money that is needed to pay the rent. Not only is this simply ethically wrong, it’s illegal. You need to find your ideal "risk vs. reward ratio" before investing with any type of investment vehicle.

6. I don't know much about self-directed trading or Alternative Investments, can I still benefit from one of your featured investments? Yes. There is no need to be a professional trader yourself to successfully and safely invest in a managed account. This alone is one of the biggest advantages to a managed account. It allows the modern investor the ability to have their account traded by a professional money manager (who trades for a living). Cayo Flow does much of the back ground work in working with emerging traders, developing or testing automated trading systems, and conducting due diligence on any trading strategy or methodologies / automated systems of established traders. This combination paves way to great advantages for the prospective investor looking for good opportunities in the Alternative Investment arena. That being said, we also encourage prospective investors to educate themselves about Forex trading and different types of Alternative Investments in general. Our opinion is that the best investor is an informed one!

7. Are you the actual trader? Do you own these systems? This depends on the system. Some of the systems we are primary stake-holders in, and have full discretion to run these as we please. Other systems we are partial stake-holders, and other systems we enter into joint venture arrangements with the developers and/or owners of the systems to be able to offer these to our investor base.

8. What can I expect once I am invested in your systems? You can expect to see a combination of both winning and loosing days. Usually our winning days far out number our loosing days, but we do have to contend with the odd loosing day from time to time. Those who let their funds compound for the full month, and from month to month typically do very well and their investment grows at a nice and healthy pace based on historical performance. You can expect monthly updates and commentary on our systems. You can expect recommendations from us on portfolio adjustments. You can expect full transparency and prompt communication. You will also notice that often we are adjusting our systems from time to time to adapt to ever-changing market conditions. Most importantly you can count on us managing accounts with proper risk management and being around for the long-term.

9. Does Cayo Flow test out their featured Investments offered here with their own money? Yes, typically a member from our team will test out all of our featured investments with our own live money first before offering them to our investors. In some cases where we want to be really cautious and the system does not belong to us, we will negotiate with the trader or developer to let us monitor their live trading with read only access first. After this we go live with our funds. If it passes our live tests, we roll it out to our investor base.

10. How do I get started investing with your featured investments? Please visit the profile page of each of our featured investments for information on how to get started. Typically you send us an email with your interest in participating, and with which investment, and will work with you to ensure you receive the proper forms.

11. Do you guys only deal with currency traders? Or do you have other traders trading other asset classes as well? We work with traders of almost every asset class. Although the blunt of our investments are based around foreign exchange trading, we have no problems adding in any type of trader or investment which is profitable and satisfies our due diligence. We look for a lengthy and profitable track record first, and then for responsible and proper risk and money management practices. As far as trading goes, the asset class can come second as there are great traders who specialize in each and every one.

12. I know (or am) an amazing trader that you (or I) might be interested in being listed as a feature investment of yours. Cayo Flow is constantly seeking out professional money managers. We have more than enough high potential traders coming across our desk right now, to the point that it is almost overwhelming. For most of these traders, after our initial due diligence has been met, we like to watch or test their trading ability with read only access or a real money account for quite a while before approving them as an actual investment opportunity for our company. If things work out, we may look to offer them to our investor base. This is based solely on their experience, their track record, their performance, and their risk profile. Interested parties are urged to contact us via our contacts page. This component of Cayo Flow is a full-time job in itself, so please - serious inquiries only. We won't look at any money managers without a 9 month long (absolute minimum) track record or trade history.

13. How do you and the traders make money?
For most of our investments, this typically comes from a performance or "incentive" fee, as it is often called. What this means, is that at the end of each trading month, the trader will deduct a commission from the profits made on the investor's account. This commission is also shared with the Cayo Flow team. For example, if your account had a GROSS positive gain one month of +10%, and the performance fee was 30% (this is how the trader makes money for managing your account), then the NET return to the investor would be +7%.

14. Do you accept clients of any size or from any jurisdiction?
Some of our featured investments may have various restrictions imposed on them in terms of the minimum investment amount or the person/entity's domicile or jurisdiction. This varies from product to another so please inquire if there are any questions or concerns on this matter. Our firm reserves the right to refuse any client/entity from participation.

15. What do you mean when you say a trader takes an incentive fee on returns received of "New High Water Mark" profits? A High Water Mark, is a common approach to the calculation of incentive fees. It means that incentive fees are paid only on NET new rises in asset value. If a temporary decline occurs, it must be recouped before new incentive fees are paid. This ensures that investment managers receive a performance fee only when the account value exceeds its previous high.

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RISK DISCLOSURE: Alternative Investments carry a high degree of risk, and may not be suitable for all investors. Before deciding to participate in Alternative Investments you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Alternative Investments, and seek advice from an independent financial advisor if you have any doubts or concerns.