Exploring Alternative Investments and Building a Long Term Vision
Common Sense Financial Podcast
Exploring Alternative Investments and Building a Long Term Vision
This chapter explores how endowment funds are moving towards private investments over public markets and showcases successful strategies like Yale endowment's unique investment approach. It also discusses the importance of long-term investing, particularly for retirees, and the benefits of diversifying into alternative investments beyond the conventional 4% rule.
In this episode, Brian Skrobonja explains what alternative investments are and why they are the fastest route to growing your assets or retirement savings.
He sheds light on how the most successful investors in the world keep getting wealthier and how to use an endowment like strategy to position your retirement assets.
- Brian explores alternative investments opportunities.
- He goes over what larger investors are doing to diversify away from the public market in an effort to help clients protect downside risks.
- The shift in investment philosophy amongst the largest investors is something to pay attention to as it could offer valuable insights on how to position your retirement assets.
- Brian explains why it's prudent for investors to adopt an endowment like model.
- The wealthiest and most successful investors in the world keep getting wealthier, not because they are lucky or privileged, but because they are playing a different game than the average investor.
- According to Brian, with medical advancements extending life beyond what we have seen in the past, we are entering a longevity dilemma as people may find themselves living longer than their assets.
- For Brian, the traditional retirement age tied to social security eligibility has longevity implications that are being overlooked.
- The 4% rule suggests you can safely withdraw 4% of your retirement savings annually with the assumption that the balance in your account will sustain you for 30 years.
- Brian shares why he believes the 4% rule is not sustainable in the modern age.
- There's risk with any type of investment and alternatives are no exception.
- Brian talks about portfolio diversification and why we need to expand the definition of diversification.
- Brian talks about alternative investments and why you should consider having a portion of your savings in private equity, private debt, real estate trusts, and even oil and gas.
- For Brian, the stock market may be a core component of a portfolio, but it cannot be the only holding.
- Should investors get out of public markets entirely?
- According to Brian, investors should not get out of the market entirely, but should acknowledge that there are many investment opportunities that are far better than the stock market.
- We are seeing the world change before our eyes. The way we invest today needs to be forward looking to consider the changes that are underway.
Mentioned in this episode:
Common Sense Financial Podcast on YouTube
Common Sense Financial Podcast on Spotify
References for this episode:
kiplinger.com/article/investing/t047-c032-s014-to-succeed-at-investing-do-what-yale-does.html
wsj.com/finance/investing/pension-funds-stocks-bonds-679b8536
imf.org/external/pubs/ft/wp/2000/wp0018.pdf
weforum.org/agenda/2022/04/longer-healthier-lives-everyone/
nmhc.org/industry-topics/affordable-housing/apartment-supply-shortage/
sealynet.com/news/sealy-company-small-industrial-spaces/
nationalaffairs.com/publications/detail/inflation-and-debt
nasdaq.com/articles/revisiting-the-classic-60-40-portfolio-as-challenges-loom
Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS.
Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure.
The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. The views and opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of Madison Avenue Securities, LLC
This material contains forward looking statements. Forward looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Actual future results and trends may differ materially from what is forecast.
Investing involves risk including the potential loss of principal. Consider your risk tolerance and specific situation before investing.
Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Carefully read all of the relevant investment product’s offering documents and information before investing. Seriously consider investment suitability by referencing your financial position, investment objectives, and risks profile before making any investment decision.
Alternative investments may be subject to less regulation than other types of pooled investment vehicles. Alternative Investments may impose significant fees, including incentive fees that are based upon a percentage of the realized and unrealized gains and an individual’s net returns may differ significantly from actual returns. Such fees may offset all or a significant portion of such Alternative Investment’s trading profits. Incorporating alternative investments into a portfolio presents the opportunity for significant losses including in some cases, losses which exceed the principal amount invested. Also, some alternative investments have experienced periods of extreme volatility and in general, are not suitable for all investors. Asset allocation and diversification strategies do not ensure profit or protect against loss in declining markets. Endowment funds are managed for institutions not individuals. An endowment-like strategy is not an endowment or an endowment fund.
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