If diversification is called the only “free lunch” on Wall Street, why do so many investors only hold stocks and bonds? As 2022 exemplified, inflationary shocks represent a real risk to any portfolio comprised of only these assets (particularly for retirees). Yet the adoption of alternative diversifiers remains muted.
Our research on “return stacking”, which is an investment concept originally adopted by institutional investors in the 1980s, enables investors to keep their core stock and bond beta while introducing diversifying alternatives as an overlay to their portfolio. |
