Hedging Investments - Alternative Investment Strategies

How we choose investments that move differently than equities and bonds.

“I appreciate the sophistication and additional diversification of hedging strategies and alternative investments.”

Benefits of Diversifying Investments

Investing with hedging strategies and alternatives may provide you several benefits as below:

Smoother returns

Reduced volatility

Hand with Money

Sleep easy at night

We Call it SBMA

Secular Bull/Bear Market Alternatives

From a rapidly growing universe of alternative investments, our investment committee researches the historical correlations between investments. We want assets that have little relationship to equities or to each other. In today’s volatile investment environment, these are often hard to find.

  • Precious metals (like gold)
  • Natural resources (like oil)
  • Currencies
  • Commodities
  • Private equity
  • Real estate
  • Managed futures
  • Arbitrage
Hedging and alternative strategies provide

Less bounciness

As shown in the picture, hedging and alternative investments strategy reduces the overall bounciness of a portfolio.

This strategy increases the chances of higher average long-term returns. Each investment has an average rate of return that is historically independent of equities and bonds. A smoother ride may help you sleep better at night.

SBMA Less Bounciness

Our Alternative Investments Process

Relationship analysis

We prefer publicly traded, marketable mutual funds or ETFs. This enables us to both purchase and sell investments, as necessary. Flexibility is a key element to SBMA.

Performance analysis

After finding a series of investments, the A&I Financial Services Investment Committee ranks them by their relative performance. Using a proprietary methodology, we choose the investments likely to deliver consistent positive performance and to maintain a low correlation with each other and with equities and bonds.

Allocation decisions

After determining the ideal investments for the asset allocations, and determining the technical trends are desirable, the investment committee layers the investments into a portfolio. We take great care to reduce the bounciness of your overall portfolio. Modern portfolio theory plays a key part in the asset allocation of SBMA.

Ongoing monitoring

Our investment policy committee meets at least weekly to discuss investments. We meet with the managers of any investments at least annually. Then, we repeat this four-step process.

Not every client invests with alternative investments or hedging strategies. Every client talks with their personal financial advisor about their unique situation, and the advisor invests appropriately.

We educate our clients about the specific risks associated with these strategies. These risks can include limited liquidity, the use of leverage, commodity price volatility, tax considerations and increased expenses.

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Balance the risk and reward between investments to achieve your real-life financial goals.

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Stock and Stock Fund Investments
Concentrated Equity Owner Guy Espresso

Concentrated Equity Strategies

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Single Stock Diversification

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Single Stock Diversification

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Recent Blog Post

Read this Periscope to learn what today’s politics might mean for our investments and also to get the short, (and long if you like), version of our investment and economic commentary.

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Alternative Investment Strategy Advisor

Denver | Englewood | Greenwood Village | Littleton | Centennial