Safe way to play the futures market: BMO's Managed Futures Certificates lets you play the futures market with relative safety

Most conservative investors stay away from the futures market. And for good reason. You can lose a fortune overnight in this market. But you can as quickly make a fortune too. However, casual players very seldom win in the futures market.

If you are attracted to the futures market but cannot afford to -- or do not want to -- lose, you may want to consider Bank of Montreal Managed Futures Certificates.

This is how it works. You invest a minimum of $5,000 for five years. 70% of this money is invested in strip bonds. The remaining 30% is used to trade futures contracts.

At the end of five years, one of three things will happen.

First, the worst case scenario. The futures trading is a disaster. In this case, once your loss reaches 25% (or 7.5% of your total investment), the futures trading will be discontinued and your money will be invested in interest paying investments. At the end of five years, the 70% invested in strip bonds will be equal to your initial investment. You get you money back. In addition, you will also get back the 22.5% from the discontinued futures account for a return of 4% per year.

The second possibility is that the futures part of the account neither loses nor gains. In which case, you will get back your capital as well as the 30% invested the futures market. In this scenario, you get the equivalent of approximately 5.5% interest per year. Not bad, but not enough reason to invest in these certificates.

The third scenario is the most exciting. The money invested in the futures market can double or quadruple (there is really no limit as to how large the return can be). Suppose it triples in five years -- not an unrealistic expectation -- the return on your investment (over five years) will be 90%. You would have almost doubled your money.

Realistically, BMO's Managed Futures Certificates provide reasonable downside protection, with a realistic chance to attain an above average return. At a time when guaranteed returns on investment are abysmally low, these certificates are worth considering. If your worst-case scenario is a four % return, why not take a chance?