Investors need to be fully diversified
Surprisingly, the total stock market is no longer adequately diversified. Did you know that, as of 7/19/2021, eight out of the ten largest publicly traded companies are all technology related. Investors need a balanced mix of stocks that are not so heavily weighted in one sector. Prior to 2008, the financials were the largest sector weighting and that did not work out too well.
Bond funds are not as safe as you think they are
Did you know that for roughly every year of maturity you have in a bond, the expected value of the bond can fall up to 1% in value if interest rates rise 1%? So, if you owned a 20 year treasury, you could potentially lose as much as 20% of your investment. Something that you thought was risk free really is not.
Alternative investments can help diversify bond risk
When you hear the term hedge fund, you should be skeptical by the time a typical investor has an opportunity to purchase one, it has often saturated the market, and they are looking for what they call "dumb money". Rest assured, we have carefully vetted the universe and have institutional access to purchase a small portion of this space**. Risks are often less than some bond funds, and it serves as an extra diversification tool.
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