Alternatives as part of portfolio

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trueson1
Posts: 90
Joined: Mon Mar 13, 2017 11:40 am

Alternatives as part of portfolio

Post by trueson1 » Sat Jan 13, 2018 9:45 am

I see alternatives in Personal Capital at a what I think is a fairly high % (10 % in my case of a ~60/40 stock/bond) of their suggested portfolio.

How do others view alternatives in their portfolio?

dbr
Posts: 26980
Joined: Sun Mar 04, 2007 9:50 am

Re: Alternatives as part of portfolio

Post by dbr » Sat Jan 13, 2018 10:16 am

trueson1 wrote:
Sat Jan 13, 2018 9:45 am
I see alternatives in Personal Capital at a what I think is a fairly high % (10 % in my case of a ~60/40 stock/bond) of their suggested portfolio.

How do others view alternatives in their portfolio?
As alternatives? But it might help to be specific about what you have in mind.

trueson1
Posts: 90
Joined: Mon Mar 13, 2017 11:40 am

Re: Alternatives as part of portfolio

Post by trueson1 » Sat Jan 13, 2018 3:51 pm

Generally, in Personal Capital with Alternatives they are referring to REITS and commodity exposure available through ETFs such as gold or oil.

dbr
Posts: 26980
Joined: Sun Mar 04, 2007 9:50 am

Re: Alternatives as part of portfolio

Post by dbr » Sat Jan 13, 2018 4:06 pm

trueson1 wrote:
Sat Jan 13, 2018 3:51 pm
Generally, in Personal Capital with Alternatives they are referring to REITS and commodity exposure available through ETFs such as gold or oil.
I would view REITS as basically stocks and put them in the same allocation, though there is something to be discussed there if the idea is to tilt to REITS. An actual commodity fund or a fund that actually owns physical gold really is an alternative and that is a separate asset class. Gold mining stocks are just stocks. A different category would be things like pipeline MLP's. Another example of an alternative would be preferred stocks. I don't know what people do with those as an asset class except avoid them. I don't know how one should put real estate holdings into a portfolio viewed as a unified entity. It is also difficult to account for holdings such as options.

Some good reading is here: https://www.amazon.com/Only-Guide-Alter ... lternative

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