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WHY ALTERNATIVE INVESTING
Risk management: Nobel Prize-winning Modern Portfolio Theory* shows that placing assets in non-correlated asset classes can lower risk in a portfolio. According to a landmark study by Dr. John Lintner of Harvard University, certain non-correlated asset classes, when added to a portfolio of stocks and bonds, "show substantially lower risk at every possible level of return than portfolios of stocks (or stocks and bonds) alone."**
Returns: Diversification provides the opportunity for positive returns in negative markets. Sometimes this can result in negative returns for an alternative investment during positive movements in the stock market, but the overall goal is to reduce portfolio volatility.
Non-correlation: We design traditional portfolios with diversification into the usual variety of asset classes, such as value and growth, large and small, U.S. and international, stocks and bonds. But there are time periods when it seems that all of these are producing sub-par or even negative returns at the same time. This is why we encourage investors to look "outside the box" for true diversification. This type of investing is not suitable for everyone. Please consult your financial consultant before investing.
We design portfolios to match investors' financial goals, personal values, and risk tolerance.
*as put forth by Harry Markowitz et al
**Dr. John Lintner, Harvard University, paper presented to the Annual Conference of Financial Analysts Federation, May 1983 (paper available upon request)
IOWA PROGRESSIVE ASSET MANAGEMENT
505 N 4th Street, Suite 200
Fairfield, IA 52556
800.509.9096 641.469.4000
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