A few weeks ago, we talked about correlation and how adding low or non-correlated assets to a portfolio can help to both reduce risk and potentially improve returns. We followed that topic up with a discussion on alternative investments to help further reduce risk and potentially improve returns. The reason these strategies work is because they are both intended to achieve the same objective, which is to reduce volatility. Volatility, in my opinion, is the biggest overall risk to the portfolio of a retiree. This is so important today, compared to a decade or two ago, because it has become far harder to achieve a consistent return without taking on significantly more risk. The risk we are talking about is known as standard deviation.
T. Eric Reich, CIMA, CFP, CLU, ChFC is president and founder of Reich Asset Management and can be reached at 609-486-5073 or eric@reichassetmanagement.com.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
