Diversification – it’s the golden rule of investing. And appropriately allocating assets to account for personal objectives, risk tolerance and time horizon is a critical part of a thorough financial plan. For most, a mix of traditional investments – such as stocks and bonds – is a suitable approach. However, more affluent investors should also consider additional strategies to further broaden their portfolios.

While as with all investments, past performance is not a guarantee of future results, the selective addition of alternative investments that have historically demonstrated lower correlation to traditional market indices may:

Reduce overall portfolio volatility through diversification and

Increase long-term portfolio performance through a variety of market conditions.1

Examples of some of the investment opportunities in this class include:2

  • Hedge Funds,
  • Funds of funds,
  • Managed futures,
  • Private equity and venture capital and
  • Real estate.

Since alternative investments may not be suitable for all investors, it is critical that you and your financial team work together to determine what investments may be right for you. Factors you should discuss with your financial advisor when evaluating alternative investments for your portfolio include:

  • Your current asset allocation and the size of your portfolio,
  • Your time horizon and risk tolerance,
  • Liquidity needs in your portfolio,
  • Willingness to accept risk associated with more speculative strategies and tax considerations.

[1] There is no assurance that these objectives will be achieved.

[2] Your financial advisor may provide specific information on current offerings.

 

Please review any offering materials or the prospectus carefully, and consult with your tax advisor or accountant prior to investing. Alternative investments involve specific risks that may be greater than those associated with traditional investments and may be offered only to clients who meet specific suitability requirements, including minimum net worth tests. You should consider the special risks with alternatives investments including limited liquidity, tax considerations, incentive fee structure, potentially speculative investment strategies, and different regulatory and reporting requirements. You should only invest in hedge funds, managed futures or other similar strategies if you do not require a liquid investment and can bear the risk of substantial loss. There can be no assurance that any investment will meet its performance objectives or that substantial losses will be avoided.