A World of Opportunities to Enhance Portfolio Diversification
Alternative investments are strategies or asset classes outside of traditional stocks, bonds, and cash.
They can provide protection against volatility, hedge against inflation, and potentially improve the risk-adjusted returns of portfolios through the diversification benefits they provide.
The diversification potential of alternatives can be seen in the lower correlations with traditional investments that many have exhibited historically. Correlation refers to how assets perform relative to one another, with lower correlations leading to more diversification benefits.
The MainStreet Advisors’ investment research team considers real assets, precious metals, private credit, private equity, hedge funds, managed futures, and cryptocurrency as options for a potential allocation to alternatives in client portfolios depending on suitability.
A thoughtful approach to including alternatives in a portfolio can reduce the volatility of returns over time, potentially enhance returns or income, and help improve the probability of achieving an investment goal.
Top Advantages of Alternative Investments
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