Diversification Beyond Stocks: Alternative Assets Explained

Traditional diversification emphasizes stocks and bonds. However, in today's environment where correlations between stocks and bonds have increased, genuine diversification requires alternative assets. Alternative assets include private equity, real estate, commodities, and hedge strategies.

Why Alternative Assets Matter

During market stress, stocks and bonds often decline together. Alternative assets, particularly those with low correlation to public markets, provide genuine portfolio protection. Real estate generates income independent of stock market performance. Commodities often appreciate during inflation when stocks decline.

Implementation Considerations

Alternative assets require longer investment horizons, higher minimum investments, and more sophisticated evaluation. They also typically have lower liquidity than public securities. These characteristics make them unsuitable for short-term capital but ideal for long-term wealth preservation.

The Kairross Approach

Our members gain access to carefully selected alternative investments that meet institutional standards. We evaluate each opportunity for its diversification benefit, risk-adjusted return potential, and alignment with overall portfolio objectives.