No. 43 of 106 Things We Do For Clients
Provide you with alternative investment options.
When Americans think of investments the focus is usually on stocks, which represent owning a slice of American companies. This is not surprising, since the focus of the financial press is US corporations. The most popular slice to own is the S&P 500, which represents the 500 largest US corporations. It’s not uncommon for US stocks to comprise 60% of a “moderately conservative” portfolio. If you are truly a moderately conservative investor, you will want to hold many other assets classes to protect yourself from the steep gyrations given to a single asset class like large US stocks. These alternatives include:
• Large, mid, small, and micro-cap US and international stocks.
• Global fixed income holdings of high quality, high yield, and Treasury Inflation Protected Securities (TIPS).
• A global mix of Real Estate Investment Trusts (REITS), commodity index funds, managed futures, and long/short funds.
A strategic mix of these investments may mean the portfolio will hold less than 10% of large US stocks without giving up much upside gain and significantly minimizing volatility.
