CHRIS RUEDI
Over the past few decades, many retired investors or those preparing to retire have turned to a portfolio composition that provides the opportunity for growth while maintaining some level of perceived security. The 60/40 portfolio, as it is now called, is usually made up of a mix of 60% large US company stocks and 40% US mid-tier bonds. Combining these two areas has historically produced favorable long-term results, according to Morningstar Direct.
The equity component provides opportunities for capital appreciation while the bond component has acted as something of a safety net during market downturns, with investors fleeing to bonds as a perceived safe haven. Each side of the portfolio has seen largely favorable conditions over the past 40 years.
Advances in technology, global expansions and a growing middle class have propelled stocks to higher valuations. The steady decline in bond yields boosted bond yields. When rates fall, bond prices rise.
The current economic landscape offers somewhat different conditions. We believe stocks and bonds continue to dominate investment portfolios, but other asset classes should be considered when determining the composition of the 60/40 portfolio of the future.
Alternative investments have been around in one form or another for years, but opportunities for small investors have only become possible more recently. As a result, many investors shy away from alternatives for fear of the unknown, especially compared to more “traditional” options like stocks and bonds. Many are surprised to learn that assets such as real estate, high yield bonds and emerging markets, which we all once thought of as alternatives, are now widely accepted as part of a diversified portfolio.
The inclusion of these so-called alternative asset classes can serve several purposes. For many, we believe they are best deployed as an added layer of diversification that can be particularly effective during tough market times. Some alternatives may not be subject to the same pressures that plague equity or bond investments and can potentially offer additional sources of return to an investment portfolio.
The universe of alternatives is very vast and is constantly expanding. Investments focused on reinsurance, trend following, real assets, corporate event drivers, and direct lending are just a few of the alternative asset classes commonly included.
The investment structure of each alternative varies and some may only be suitable for persons or entities who meet certain conditions. Others are available to the general public through mutual fund offerings.
Investors should keep two important aspects in mind when evaluating alternative options: liquidity and cost. Some alternatives require investors to commit funds for longer periods of time, while others offer daily prices that can be bought or sold without limitation.
Operating costs tend to be higher for these more specialized alternatives, so it is important to understand how the inclusion of these investments could impact the overall cost of the portfolio.
Investors in traditional 60/40 portfolios have had success over the past few years, but sometimes the things that get us somewhere aren’t always the best options for the future. Reinventing the 60/40 portfolio by including some alternatives can help retirees achieve their long-term goals. Start with a discussion with your financial advisor about the types of alternatives that best suit your own plan.
Savant Wealth Management (“Savant”) is an SEC-registered investment adviser headquartered in Rockford, Illinois. Past performance may not be indicative of future results. Different types of investments involve different degrees of risk. You should not assume that any discussion or information contained in this article serves as receipt or substitute for personalized investment advice from Savant.
Photos: 20 other BN restaurants we miss
20 other BN restaurants we miss
At Beningo

After 46 years in the western part of Bloomington, Beningo’s restaurant closed in August 2016 when owners Denny and Janet Whitworth retired. The location is now the Crawford’s Corner pub.
Karen Hansen
crazy planet kitchen

Downtown Bloomington’s Crazy Planet Kitchen, a casual fine-dining restaurant with an eclectic menu, opened in 2000 and closed in 2006. Today, the space is home to Reality Bites.
Bec’s Far East Texas Grill

Bec’s Far East Texas Grill opened in 1992 in what was then downtown Normal and closed four years later after business declined. A downtown Bloomington outpost that had been open for less than two months closed around the same time.
piccolo piccolo

The popular Italian restaurant in The Parkway shopping center in Bloomington opened in 1991 and closed four years later when owner Richard Kurtz opened Richard’s in downtown Bloomington.
Divino, the fish market

Two other restaurants started by Richard Kurtz, Bloomington’s Divino and The Fishmarket Bar & Grill, opened in 1998 and 1999, respectively, and closed in 2001. The site, 400 N. Veterans Parkway, later became Valentino’s.
Karen Hansen
At Carlos O’Kelly’s

Carlos O’Kellys closed his Bloomington restaurant in 2014 after 18 years in business. The site is currently being developed in The Burger Joint and an Oberweis ice cream and dairy store.
KAREN HANSEN, PANTAGRAPH FILE PHOTO
Sonoma cuisine

The Brandtville restaurant, known for its wood-fired pizzas, opened in 1994 and closed six years later after struggling with dinner. It was replaced by Famous Dave’s Bar-B-Que.
Chi Chi’s

The Mexican restaurant opened in 1987 at Lakewood Plaza in Bloomington and closed 11 years later. It was replaced by shells Seafood restaurant.
Round on the ground

The Ground Round, at 502 IAA Drive, closed in 1996 after 17 years in Bloomington.
Graceful affairs

Gracious Affairs Restaurant and Catering Company, 1328 E. Empire St., Bloomington, closed in 1998 after nearly 10 years at that location. The closure was the result of a decision by the building’s owner, Peoria-based Cohen Furniture Co., to renovate the structure for office use.
Kip Family Restaurant

Kip’s Family restaurant general manager Steve Kiper stood in front of a phone booth outside Bloomington’s longtime restaurant, 805 Morrissey Drive, shortly before it closed in 2003. It had been open for 32 years.
Karen Hansen
Nickel double entry

The Double Nickel Drive-In, with 54 seats and a 1950s theme, opened in 1988 at the northwest corner of US, 150 and Veterans Parkway. It closed in 1997 and today the location is a Starbucks.
Hayashi

Hayashi opened at 7 Currency Drive, Bloomington, in 2005. The Japanese restaurant moved to Normal in 2012 and closed the following year.
Karen Hansen
Deli Pumpernickel

Pumpernickel’s Deli and Eatery opened in downtown Bloomington in 2004 and closed the following year. The site is now Scout’s Downtown Cafe.
Karen Hansen
Aleta Jane’s Cafe

After 14 years in business, Aleta Jane Nord closed her restaurant, Aleta Jane’s Cafe, 803 Morrissey Drive, Bloomington, in 2016.
Karen Hansen
The peep

A popular breakfast spot, The Peep Restaurant, 909 N. Hershey Road, Bloomington, opened in 2002 and closed in 2009.
Karen Hansen
tuxedo junction

The popular Bloomington restaurant in the Eastland Commons shopping center closed in 1995 after nearly a decade in business. The 130-seat restaurant specialized in seafood and was located south of what was then Cub Foods.
Tian Tsin

Bloomington’s Tien Tsin Restaurant, 1500 E. Empire St., Bloomington, closed in 2004 after 28 years in business. The restaurant specializing in Mandarin, Sichuanese and Hunan dishes.
Susie’s Coffee

The downtown Bloomington restaurant, run by Susie King, closed in 1997 after more than 40 years in business.
Henry Wellington

Henry Wellington, a restaurant in Brandtville, opened in 1997 and closed two years later. It was replaced by Jerry’s Grille.
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Chris Ruedi is a financial adviser at Savant Wealth Management, Bloomington.
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