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
- Incorporating alternative investment strategies may improve the performance and diversification of traditional 60/40 portfolios.
- Private markets may provide access to parts of the economy that public markets may not be able to provide.
- With the introduction and evolution of client-friendly vehicles, many individual investors now have access to these strategies, which are no longer the exclusive domain of large institutions and wealthy individuals.
- Investors should know the value proposition of alternatives so they can help clients recognize how such allocations may strengthen their portfolios.