Is now the right time to invest in alternatives?

Is now the right time to invest in alternatives?

The Coronavirus pandemic has caused a severe economic downturn and the outlook remains uncertain. Although financial markets around the world have regained their poise, conditions remain volatile and the crisis has left many investors feeling uncertain about their portfolios and what to do next.

Whilst market movements may make you feel uneasy, it is important that you do not make any rash decisions. If you disinvest during a market downturn you might miss out on any positive market movements that follow.

A diversified portfolio combines traditional investments like equities and bonds with alternative assets such as hedge funds and private market investments, and should take into account your individual financial objectives and time horizon.

One of the main advantages of including carefully selected alternatives in a portfolio, is that they offer the potential to improve risk-adjusted returns.

Alternatives can reduce the volatility of performance because over time they have a low correlation with traditional investments. They also offer the potential for additional returns by providing exposure to different opportunities.

Despite the theoretical benefits, many private investors are asking important questions about whether now is the right time to invest in alternatives. To discuss further please contact your usual Brown Shipley adviser.

 width=300 height=300 /><em><img class=alignnone size-full wp-image-6442  data-cke-saved-src= src= alt=

For illustrative purposes only – not drawn to scale. Source: Quintet, Markowitz¹

¹ Harry Markowitz was an economist renowned for his research on Modern Portfolio Theory. He received the Nobel Prize in Economics in 1990 for his work in this area.

For those clients who have access to My Brown Shipley you can check your portfolio valuation online. If you have any questions, please contact your usual Brown Shipley adviser.


Celine El Debs

Group Head of Alternatives

Bill Street

Group Chief Investment Officer

Non-Independent Research

The information contained in this article is defined as non-independent research because it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, including any prohibition on dealing ahead of the dissemination of this information.

How to Use this Information

This article contains general information only and is not intended to constitute financial or other professional advice or a recommendation that any recipient of this information should make any particular investment decision. Always consult a suitably qualified financial advisor on any specific financial matter or problem that you have.

Except insofar as liability under any statute cannot be excluded, neither Brown Shipley nor any employee or associate of them accepts any liability (whether arising in contract, tort, negligence or otherwise) for any error or omission in this article or for any resulting loss or damage whether direct, indirect, consequential or otherwise suffered by the recipient of this article.

Investment Risk

Investing in stocks either directly or indirectly carries investment risk. The value of equity based investments may go down as well as up over time due to factors such as, market volatility, interest rates, and general economic conditions.