{"id":10,"date":"2018-10-04T20:22:44","date_gmt":"2018-10-04T20:22:44","guid":{"rendered":"https:\/\/yourdf.net\/?p=10"},"modified":"2023-05-09T05:53:02","modified_gmt":"2023-05-09T12:53:02","slug":"2018-10-2-alternative-investments-the-time-to-hedge-may-be-now","status":"publish","type":"post","link":"https:\/\/yourdedicatedfiduciary.com\/?p=10","title":{"rendered":"Alternative Investments: The Time to Hedge May Be Now"},"content":{"rendered":"
\"Mark

Mark Yusko (left), Vance Barse (right), at the FA Inside Alternative Investments & Asset Allocation Conference in Las Vegas, September 24, 2018.<\/span><\/p><\/div>\n

It\u2019s been a decade since the collapse of Lehman Brothers and the \u201cGreat Recession\u201d of 2008.\u00a0 Today, the stock market keeps notching new highs, consumer confidence is at an all-time high, unemployment is around an all-time low, and Uber drivers are touting marijuana stocks instead of that \u201cBitcoin thing.\u201d<\/p>\n

The highs and lows of the economy, and how we tend to minimize the inevitable cycles of markets, was very much on my mind at the recent Inside Alts<\/em> conference in Las Vegas, where blatant excesses are conspicuously displayed for all to see, like some aspects of the current U.S. economy.\u00a0 This conference was a wonderful opportunity to hear some of the industry\u2019s leading figures share their perspectives, reconnect with colleagues from my former career, and get a pulse on current happenings inside the \u201calts\u201d industry.<\/p>\n

Prior to becoming a wealth strategist, I spent nearly a decade consulting leading financial advisors around the country on how to implement alternative investment and absolute return strategies into their clients\u2019 portfolios.<\/p>\n

At a high level, alternative investments<\/em> have historically had low- or near-zero correlation to the S&P 500 and have been used as diversifiers over longer timeframes and market cycles.\u00a0 In non-propeller head speak, this means that alternative investments have historically had returns that behave independently of the stock market.<\/p>\n

Absolute return strategies<\/em>, which are a subset of alternative investments, strive to hedge your portfolio by taking both long and short positions on what they trade, such as stocks.\u00a0 Because absolute return managers can short, many of them have the potential to reduce downside risk in stock and bond portfolios during periods of economic duress such as the Tech Wreck of \u201900 \u2013 \u201902 and the Credit Crisis of 2008.<\/p>\n

The alternative investment and absolute return landscape is quite large and intimidating if you are not familiar with the space.\u00a0 Even for me, a former alternative investment consultant, there is a seemingly unending barrage of emails and calls from firms\u2014large and small, old and new\u2014announcing their latest and greatest in this area.<\/p>\n

Here is a quick list of sample alts you may find value in learning more about:<\/p>\n

Alternative Investments<\/strong><\/span><\/h3>\n