How to Make the Grade on Your Quarterly Report Card

School may be in your rearview mirror, but as a financial professional, that doesn’t mean your report cards are.

The investment world operates on its own grading scale and every advisor, broker-dealer and due diligence officer knows the pressure. Quarterly reports are your own “report card,” and today’s continued low-interest rate environment makes delivering returns quite the challenge.

Advisors must create client confidence to differentiate themselves from the competition, both human and robotic. Broker-dealers need to provide their advisors with strong options that support that differentiation. And due diligence officers need to identify innovative, suitable alternatives to make it all happen.

So here’s the question of the day: Are your portfolio returns earing passing grades on your report cards?

If so, great. It means you’ve found a way to balance risk, probably by embedding a good chunk of alternative investments into your portfolio to lower correlations and effectively hedge the general market trends and reduce risk, regardless of general market volatility. More importantly, it means you’ve found a way to achieve some very real differentiation.

Could your grades could use a boost? If so, don’t overlook what sophisticated investment platforms are emphasizing today.

The best ones aren’t following the trends. Instead, they’re looking at stable, non-correlated investments that offer unique growth opportunities and hedge market movement. In most cases, these forward-thinkers are seeking alternative funds that offer unique characteristics that have the potential to lower portfolio correlations and provide additional alpha.

While everyone’s ultimate goal is to “buy low and sell high,” even experienced investors fail to abide by the rules to make that happen. The surest route to failure: follow the trends.

Instead, seek asset classes that are capital constrained simply because they haven’t yet become the next-best-thing. Opportunities for growth will be in your hand when the trend emerges — and the values increase — down the road.

Posted in