%0 Journal Article %A Robert Mileff %A Nathan Sonnenberg %A Scott Welch %T Alternative Lifestyle: The Evolution of Alternative
Investments %D 2012 %R 10.3905/jwm.2012.15.1.027 %J The Journal of Wealth Management %P 27-40 %V 15 %N 1 %X Opinions and the use of alternative investments have fluctuated wildly since they became popular with high-networth (HNW) investors in the early 1990s. In the early years, investors accessed alternatives primarily through “absolute return,” hedged equity, and managed futures strategies. Many investors deployed alternative investment at the implementation stage rather than the allocation stage of portfolio construction, carving out some portion of their fixed-income allocation for absolute return strategies and some smaller portion of their equity allocation for hedged equity and CTA strategies. Times became somewhat more difficult after the 2008 crisis. The article first revisits the argument for including alternatives within diversified portfolios. It then analyzes the trends and developments in alternative investing over the past five years and discusses how they dictate a different conversation with investors about their purpose, acceptable or unacceptable trade-offs, and appropriate ways to incorporate alternatives in well-diversified portfolios.TOPICS: Real assets/alternative investments/private equity, wealth management, portfolio construction %U https://jwm.pm-research.com/content/iijwealthmgmt/15/1/27.full.pdf