In July I attended a conference in Newport, Rhode Island for family wealth offices. (I used to consult to some family wealth offices in a previous incarnation, which is when I started attending.) I continue to go, since once in a while, investment ideas are introduced here before they begin to appear elsewhere.
Many “alternative” investments (those with lower correlation to traditional asset classes) have historically been the province of these high net worth investors. More and more of these are becoming available in much less expensive and more liquid form, and there was a presentation on just that topic which was very interesting. Bob Rice, alternative investments editor at Bloomberg TV, was the speaker, and he gave an overview of his new book The Alternative Answer: the Nontraditional Investments That Drive the World’s Best-Performing Portfolios. Not all of them, it turns out, have been worth pursuing. But where viable, it may be possible to use them and help reduce portfolio volatility. This is a topic that has been on my radar for a while, but implementation has been an issue, as is liquidity. They are not suitable for all investors in all forms, and some involve high levels of risk, but some may be worth exploring.