Sunday, July 25, 2010

Using Alternative Investments to Reduce Portfolio Volatility

Robert J. Lindner, CEO of Lindner Capital Advisors (a TAMP that provides third-party asset management platform services to independent advisors and IBD registered reps), and I had a very interesting discussion in July 2010.

Our conversation is captured in this 19 minute podcast interview: Using Alternative Investments to Reduce Portfolio Volatility. It’s well worth the time you’ll spend listening to Bob share why his team is now adding Managed Futures to an otherwise well-diversified portfolio of low-cost asset class funds (e.g., DFA funds).

Lindner shares some pretty convincing research during our conversation and in the published articles, below.

The Missing Piece of the Portfolio Puzzle – November 2009

Managed futures have only recently been made accessible to individual investors. While viewed as a bit risky, when added to well-diversified portfolios of stocks and bonds and properly managed, these investments may help protect against market declines. Read Robert Lindner’s full article in Physician's Money Digest.

Subtraction Through Addition: Adding Risk to a Client's Portfolio Can Reduce Overall Risk – March 2010

Anyone who has studied basic portfolio construction understands that it’s possible to reduce the overall risk in a portfolio by adding an asset class that has low or negative correlation to the rest of that portfolio’s asset class constituents. At least, that’s what they taught us in Investing 101. That’s all changed now. What people are really interested in still is how the strategy worked in 2008Read Robert Lindner’s full article in Investment Advisor magazine.

Putting It in Neutral : How You Can Improve a Client’s Portfolio by Using a Market Neutral Strategy April 2010

With every bear market the discussion as to whether "buy and hold" works invariably resurfaces. It will be analyzed in journals, opined over in the mainstream media, and spun into the sales pitch du jour for active management. Then we enter the next bull run and investors simply don’t pay attention anymore. Or perhaps they assume that end-date bias is the culprit, so why don’t we just pick a different end date and be done with it? Well, that only works if you aren’t within a few years of retiring or your stomach is made of iron… Read Robert Lindner’s full article in Investment Advisor magazine.

Bob and his team will be at the Innovative Alternative Strategies Conference put on by Financial Advisor magazine, Private Wealth magazine and the folks at Charter Media July 26-28, 2010 in Chicago. Stop by the Lindner Capital Advisors booth and say hi. And don't miss Bob's panel presentation Tuesday, July 27, 2010 at 2:00 pm. I'll be there and look forward to seeing you if you can make it!

Get additional updates by following @Lindner_Capital on Twitter.

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