Alt Blend

In the previous three alt.Blend posts, we covered:

• Living longer coupled with a low-rate environment poses serious challenges to investors; however, similar to positively affecting life expectancy, there are things we can do to increase portfolio longevity.

Links mentioned in this episode:

• http://altblend.com

Many people have heard of the modern-day Mark Wahlberg, as he’s been an A-list celebrity for many years and was even the world’s best-paid actor in 2017. Far fewer people – especially those coming of age in the early 90s (like yours truly) – likely remember his bringing the world Good Vibrations as the leader of Marky Mark & The Funky Bunch. Although it wasn’t the type of music my supercool-hockey-playing-skateboarding friends and I actively listened to, that song certainly evokes some nostalgic feeling of that era. And I’m sure Mark Wahlberg will be happy to know that his former persona can still inspire both hilarious quotes and puns of questionable quality (like today’s title).

Picking up where we left off in the last alt.Blend, we’re now looking for our B-squad: investment strategies that can help replace a portion of traditional bonds (especially US Treasuries) that will no longer provide the income or total-return needed for adequate portfolio longevity. And, as I previously mentioned, there won’t be any perfect solutions, so this rethinking of portfolios will also require some adjustment of our expectations, and that’s where today’s title comes in. Today will focus more on the expectations-setting, and the next piece – likely the last in this miniseries – will outline solutions.

Links mentioned in this episode:

From Steve Tresnan, Private Wealth Advisor of The Bahnsen Group

In part one of this topic, we discussed human longevity and how living longer – along with the quality of one’s overall health – can increase the demand on one’s retirement portfolio. I also proposed the notion that the overall health and sustainability of a retirement portfolio is an aggregate of underlying components, tax structure, monitoring/rebalancing, and the stress (volatility, income/spending needs) placed upon it. In this part, we’ll begin to identify investments to help increase portfolio longevity. With this in mind, strategies that can help to achieve growth of principal and income, reduced volatility, and increased yield can have a lot of utility, but it’s seldom possible to find all of those attributes within a single strategy.

Links mentioned in this episode:

This podcast is hosted by ZenCast.fm

What I consider to be an ideal retirement situation is where we can a) avoid depleting the corpus of one’s retirement nest egg by relying on systematic income for lifestyle needs, and b) also creating some additional growth to keep pace with inflation over time. And, just as we can monitor our weight, exercise regimen, stress levels, and diet to help increase our quality of life, there are parallel factors for allowing a portfolio to age gracefully

This podcast is hosted by ZenCast.fm

“It’s been a long, a long time coming. But I know change gonna come, oh yes it will” -Sam Cooke

During this past summer, I noticed a resurgence of Sam Cooke’s “A Change is Gonna Come” on news broadcasts and in social media - and appropriately so. What a fitting ballad to capture the essence of struggle, pain, and optimism associated with the widespread protests, civil rights discussions, and, of course, the “COVID moment” our country has been enduring.

Now that we’re in the midst of the release of very promising COVID-19 vaccines, however, I find the song taking on a different meaning for me. Does this other meaning have to do with alternative investments? You bet! While on the surface, the developments of Pfizer and Moderna’s mRNA vaccines have happened at “warp speed,” there is a much longer history behind these beacons of hope that makes for a captivating tale loaded with setbacks, perseverance, and – yes – investment lessons.

Here we go.

Links mentioned in this episode:

This podcast is hosted by ZenCast.fm

"Experience is a good school. But the fees are high.” -Heinrich Heine

As Mr. Heine points out, experience can be expensive, whether it’s earned via the school of hard knocks or obtained by paying others for the skillsets they bring to the table. One of the first topics that people tend to inquire about when discussing alternative investments is some reference to their charging “high fees” – especially as it relates to hedge funds or private equity funds. However, it is also vital to compare various fees of investments fairly, considering what experience/skillsets we are paying for, how the fee structure aligns managers’ interests with those of their investors, and what we should expect in return. As with many other purchases we make, the fee discussion surrounding alts is ultimately a weighing of cost vs. (expected) value. But to make an informed decision, we first need to understand typical fee structures and their application – a “feesibility” study, if you will. Here we go…

Links mentioned in this episode:

This podcast is hosted by ZenCast.fm

“If you build it, they will come” – Field of Dreams

While I don’t think any portfolio manager has been beckoned by the whispers of deceased investors to build the ultimate alternative investment fund so they could come back to life and invest in it (if you haven’t seen the movie, Field of Dreams, then this analogy is making ZERO sense right now), I do believe that selecting the “correct” structure is an essential factor in being able to successfully raise money and manage a given alt strategy; this is not in any way to imply it is the only factor. But what are the various structures and some of the pros & cons of each? In this issue of Alt Blend, we’ll explore exactly that.

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“First master the fundamentals.” -Larry Bird

It doesn’t get simpler than that. This is but the second edition of Alt Blend, and we are continuing to examine the basics, with today’s focus being on alternative investment funds. When one spends time contemplating the advent of alternative investment funds (which I have just done), it’s almost surprisingly obvious why they exist. However, it’s also a topic worth spending some time on because it will help us cover some alternative investment essentials.

• You can buy more properties than you’d be able to on your own (more financial resources, more diversification of risk)

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In considering where I may help round-out an already robust content offering at The Bahnsen Group, the world of Alternative Investments seemed to be the natural fit. After all, “alternatives” – and more specifically, private investments – are an area for which I’ve developed a passion that has led me to pursue additional education and investment solutions on behalf of clients in recent years. This undertaking has been, in part, due to our industry creating more “investor-friendly” access to such strategies. This podcast may also be an outlet for alternative perspectives on traditional finance areas, but time will tell. Overall, the goal will be to impart relatively short and interesting nuggets of information that you’re not getting elsewhere.

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