We are pleased that Konrad Kopacz, Partner & Portfolio Manager was recently interviewed on Asset TV by Jenna Dagenhart to discuss the impacts that Covid-19 has had on alternative investments.
You can watch the full video here.
From a portfolio return perspective, alternative investments have held their own as they typically do not get priced daily, nor are they subject to speculative selling in the market. If you look at pension funds, endowments, or large family offices, there is a sizable allocation to alternatives. The reason for this is that there are mandated returns that the manager needs to make in order to meet obligations or targets and if they can create a more predictable return on their investments it reduces the overall volatility of the portfolio. Not all stocks are created equal and the same goes with alternative investments. It is important to understand what’s under the hood just like buying a stock.
With the private markets, sometimes you can own this directly, which we do, but sometimes it makes sense to partner with a fund manager that specializes in the opportunity you desire. Yes, you can give away some returns in the case of fees, but if that manager has more resources and experience than you in that space, it will cost you less in the long run by avoiding mistakes and taking advantage of their expertise to generate non-market correlated returns.
All of these strategies are a piece of the puzzle, however, they are only tools to achieve the client’s financial plans objectives. I find sometimes people lose track of the most important point and should always circle back if an investment decision will be the best option to make the client’s plans a reality.
Disclaimer: This newsletter is solely the work of Konrad Kopacz and Justin Lim for the private information of their clients. Although the author is a registered Investment Advisor with Echelon Wealth Partners Inc. (“Echelon”) this is not an official publication of Echelon, and the author is not an Echelon research analyst. The views (including any recommendations) expressed in this newsletter are those of the author alone, and they have not been approved by, and are not necessarily those of, Echelon.
Echelon Wealth Partners Inc. is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.
Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by the author. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements.
The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions, and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.
These estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements.