A diverse portfolio of investments designed for a variety of market conditions, including possible catastrophic events, can help to lower the risk for investors of not realizing a satisfactory long-term return.
Avoidance, if possible, of a pronounced investment loss from an attained peak value (a “drawdown”) is important in order to lower the chances of an inferior long-term return.
“Buy and hold” strategies based on selection of single securities from a relatively small number of “blue chip” companies have disappointed investors because many such companies have poorly managed their debt levels, executive compensation incentives, and long-range strategic planning.
Many “long-only” stock portfolios, which depend heavily on rising general stock markets, have struggled to deliver the long-term return results that many investors expect and need.
"Alternative" mutual funds have developed as attractive surrogates for private placement hedge funds and generally offer advantages of transparent daily pricing, next-day redemption and no need for extended tax return filings.
Because of investment product innovation, investors of all sizes can benefit from investment solutions designed for possible success amidst a broad array of market conditions – not just a rising stock market.
A dynamic “open architecture” investment platform is increasingly necessary in order to incorporate the growing array of innovative solutions.