Articles & Insights

Investing a portion of an investor’s assets in commodities continues to be a viable alternative. It is therefore crucial to understand the different investment style options.

There’s an alternative to selling in May. Despite some investors’ perceptions, alternative strategies are used specifically to manage risk within a portfolio. Their role is to enhance diversification − away from investments in stocks and bonds.

If you understand the purpose of including alternatives in your investment portfolio — seeking improved risk-adjusted returns — you almost certainly understand that your chances of predicting when markets will move up or down is slim to none.

Commodities did not deliver in 2012 and they have yet to recover from their 2008 highs. Clients may be searching for more efficient ways to extract value from commodity investing.

If you believe in modern portfolio theory and asset allocation, you know that a disciplined investor periodically buys into underperforming asset classes, and sells out of those that over perform.

So what does this mean for investors? It’s not a new story. The answer is as old as Modern Portfolio Theory itself. Investors have been told time and time again that diversification is the key to successful portfolio management.

You’ve heard the ongoing debate on whether gold should be considered a true commodity or better classified as a currency. Investing in a broader set of commodities beyond just gold may provide greater diversification.