The term “alternative investments” is broad and, in our view, not particularly descriptive or useful. It encompasses all strategies that cannot be accessed through traditional equity and fixed income solutions. These strategies have the potential to address many of the challenges that investors face today—the need for enhanced income, inflation protection, diversification, and stability amid volatile markets.
Key Takeaways
- Alternative investment strategies may potentially improve performance of and add diversification to 60/40 portfolios.
- These strategies are no longer the exclusive domain of institutions and wealthy individuals.
- With the “democratization” of alternatives—the introduction and evolution of client-friendly vehicles—many individual investors now have access to these strategies.
- Financial Advisors should know the value proposition alternative investments in order understand how allocating to them may help strengthen client portfolios.