<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=533208126839177&amp;ev=PageView&amp;noscript=1">

With Experts Questioning the 60/40 Rule, Advisors Should Consider Incorporating Alternatives

Post on: July 22, 2016 | Todd Schweber | 0


“Investors are in need of modern day solutions for modern day markets.” Bob Rice gave a compelling keynote speech at last week's ADISA Due Diligence Forum, calling out alternatives as an important part of today's portfolio.

There's also recent discussion around how the 60/40 rule - a mix of 60% of investments in stocks and 40% in bonds - is becoming downright outdated.

There's no "one size fits all" when it comes to appropriate portfolio allocation, but many industry experts and advisors are pointing to investing in alternatives as a way to help reduce investor exposure to market volatility.

Below are two examples of alternatives that advisors can consider:

Direct Real Estate Offerings

Let’s start with real estate. I know, I know–you’ve heard it all before, but have you really looked into participating in a direct, asset-backed real estate offering? Real estate can provide high yielding assets that offer capital preservation, consistent income, and growth potential. With the prevalence of online real estate investment portals such as Encore Enterprises and Realty Mogul, advisors and investors are able to locate quality operators and managers that fit investor needs and objectives.

Private Equity Opportunities

Private equity (PE) investments into operating companies and start-ups have always been viewed as something only the elite can access, as minimum investment amounts were too large for the average investor. This is far from the truth in today’s world as technology, new rules and regulations such as The JOBs Act and cross-border access allows for emerging and mature business alike to present their capital needs to audiences of all shapes and sizes. PE adds a great level of upside potential but, as with any investment, comes with a different degree of risk which should be looked at carefully.

Today’s investors are looking for higher yields which the outdated 60/40 mindset cannot support. Traditional reasons for not considering different allocations, including lack of technology to support transactions, minimum investment requirements being too high, and limited access to product are no longer true. Advisors and investors alike are driving demand for direct alternatives which will likely continue based on current trends.


Alternative Investments and Technology Adoption for RIAs

Are you keeping up with the latest trends in financial advising? Download our E-book to discover opportunities to gain a competitive advantage in a rapidly changing market.



Securities offered through WealthForge Securities, LLC. Member FINRA/SIPC. This post is an industry update from WealthForge. The message does not constitute a research report or recommendation and does not take into account the specific investment objectives, financial situation or particular needs of the recipient. This message is not an offer to sell or the solicitation of an offer to buy any security or interest in any fund, which only can be made through a private placement memorandum that contains important information about the risks, fees and expenses of a fund.

Disclaimer: WealthForge provides this information to our clients and other friends for educational purposes only. It should not be construed or relied upon as legal advice.

Disclaimer: Altigo provides this information for educational purposes only. It should not be construed or relied upon as legal or tax advice.

About author

Todd Schweber

Todd leads business development and sales efforts at WealthForge. Prior to joining the team, Todd ran his own startup and worked hand-in-hand with other organizations looking to raise capital and connect with investors. A passion for technology as well as seeing young businesses succeed has led Todd to work within the new world of online private placements and investing.
Find me on:

Related articles