The Importance Of Alternative Assets

Alternative assets are assets other than stocks, bonds and cash or cash equivalents. These assets include commodities, real estate and precious metals. Alternative assets are a useful addition to an investment portfolio due to their low correlation to traditional assets. Adding uncorrelated assets to a portfolio lowers portfolio volatility (see blog post: The Importance Of Correlation).

Here are the correlation coefficients from 12/31/71 through 1/31/17:

ProFolio uses alternative assets to help lower portfolio volatility.

Disclosure:

The information presented here is the opinion of the author and may quickly become outdated and is subject to change without notice. All material presented in this article are compiled from sources believed to be reliable, however accuracy cannot be guaranteed. No person should make an investment decision in reliance on the information presented here.

The information presented here is distributed for education purposes only and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or participate in any particular trading strategy.

Performance data showing past performance results is no guarantee of future returns.