Investment Strategies: From Wall Street to Main Street Hingham MA

Craig Hartnett of Hingham MA would like individual investors to be aware that endowment funds have had a remarkable record of performance over the past 20 years even with the global economic crisis of 2008-2009. In 2009, the worst investing year since the Great Depression, billion dollar endowments posted a 6.1 percent annualized gain over the 10 years from June 30, 1999 to June 30, 2009, compared to the S&P 500 index, which lost of 2.22% or a 60% equity / 40% bond portfolio, which gained of 1.4% (excerpts from: John Baschab & Jon Piot. “Outperform.”)

This remarkable track record has been underpinned by an investment approach called the Endowment Model, which has an aggressive asset allocation and the broad use of alternative investment strategies.

The key underpinnings to the Endowment Model are the low allocations to fixed income and the high allocations to alternative investment strategies.

Alternative investments can provide diversification benefits to your investment portfolio. This diversification benefit occurs because alternative investments do not generally move in tandem with more traditional equity and fixed income asset classes. A portfolio that includes allocations to alternative investments may provide enhanced returns and potentially reduce your overall portfolio risk.

A recent investment evolution individual investors should be familiar with is the launch of alternative strategies in mutual funds. Many have been launched in 2014 and 2015 alone. These new investment funds provide individual investors with greater access to alternative investment strategies and with guidance of their financial advisor the opportunity to obtain some of the advantages of the Endowment Model of investing.