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How to talk to clients about … Alternative investments
Due to persistent economic pressures and volatility in public markets, delivering consistent returns with a traditional 60/40 portfolio has become more difficult in recent years. We have also seen the number of publicly listed corporations in the U.S. fall sharply in the past three decades while private equity and credit markets have continued to expand and democratize, dramatically shifting the total universe of available investment vehicles toward alternatives.
Where did the public companies go?
Private markets offer a vastly greater number of investment opportunities than the public markets.
Alternative investments can expand investors’ opportunities for portfolio diversification, income, and returns. Private market investments like equity, credit and real estate as well as infrastructure, farmland, renewables, and others offer an array of potentially uncorrelated risk exposures and return profiles that could help mitigate public market volatility, protect against inflation, and improve returns. As a broader set of investors learn more about these asset classes, their comfort level continues to rise.
Delivering consistent returns with a traditional 60/40 portfolio has become more difficult in recent years.
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Asset allocation or Diversification does not assure a profit or protect against loss.
Important information on risk
Past performance is no guarantee of future results. All investments carry a certain degree of risk, including the possible loss of principal, and there is no assurance that an investment will provide positive performance over any period of time. Certain products and services may not be available to all entities or persons. There is no guarantee that strategy’s investment objectives will be achieved.
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