Are Alternative Investments right for your Portfolio?

Investors know that a diversified portfolio is important for building long-term wealth. A portfolio can be diversified by investing in a variety of stocks, bonds and/or other securities linked to public markets. For even more diversification, investors should consider alternative investments.

Alternative investments, also known as ‘alternatives’ or ‘alts’, are investments in any asset class other than stocks, bonds or cash. The term covers a broad range of assets including everything from private equity and hedge funds to gold and real estate.

Until recently, many alternative investments have only been accessible to institutional investors and high net worth individuals. These investors have relied on alternative investments for decades to diversify their portfolios.

Now, thanks to innovative investment platforms, alternative investments are available to the average investor.

Expanding your investments beyond traditional stocks and bonds offers several benefits such as:

Diversification: The performance of alternative investments is typically less correlated with the performance of public markets. Diversifying a portfolio by adding alternatives makes it more stable and less susceptible to swings in the market.

Less Volatility: Many alternative investments are less volatile than stocks, making them a good choice for investors in search of portfolio stability.

Better Returns: Many alternative investments can offer a higher rate of return than traditional investments.

The topic of alternative investments may seem relatively new, however, you have probably already been exposed to these types of assets. For example, the Canadian Pension Plan has close to 50% of its net investible assets in alternatives*.

As investment portfolios grow, alternative investments can play an increasingly critical role in portfolio construction. At Stonebrooke Asset Management Ltd., we have identified a high-quality Alternative Fund Manager that can offer both higher return potential along with downside protection.

Is adding Alternatives Investments to your portfolio right for you? Let's find out together.

*Canada Plan Investment Board Annual Report 2016

This article is provided for information purposes only. Although the content is believed to be reliable when posted, Stonebrooke Asset Management Ltd. cannot guarantee this information is current, accurate or complete and does not assume any liability. The information is not intended to provide any insurance, financial, legal, accounting or taxation advice and should not under any circumstances be relied upon without consultation about your specific situation. The information is subject to modification and updating from time to time without notice.

December 19th, 2019