As advisors seek to preserve the risk/return profile that the 60/40 portfolio has historically delivered amid the low interest rate environment, they will need to consider adding new investment strategies to the mix. Adding alternatives can help achieve this objective.

  • In Defense of Defense  

    Think diversification and risk reduction only apply to investment portfolios? Think again. They actually apply to many aspects of our everyday life, especially during these coronavirus times. For example, if the Denver Broncos’ quarterbacks had better managed risk, i.e., not exposed themselves to the virus which then forced a quarantine for Sunday’s game, the outcome of the game might have been very different.

  • The Case for Alternatives  

    Investors have enjoyed a record-long bull market in equity markets—with potentially many more periods of upward movement ahead. But, as this bull market stumbles and volatility increases, maintaining return sources and risk exposure beyond stocks and bonds seems increasingly prudent. Recent market turmoil further highlights why a best practice in portfolio construction includes varied return sources.


    Financial TV networks are filled with investors offering their insights into where markets will move in the future. Will there be a recession in 2020? Will the S&P hit new records? The reality is no one knows.


    We are days away from closing out the decade and what an incredible decade it has been for equity investors. Annual returns since 1957 for the S&P 500 Index averaged about 8%, with volatility around 15%; but since January 2010, equities have annualized at 13.3% with volatility at 12.5%. People often think of negative results when they think of black swans, but maybe this was an extremely positive one! Given this incredible result, I’m left questioning why to diversify at all—because clearly it didn’t do anything for you this decade.