We’ve had a wonderful time these past couple days at the Envestnet Advisor Summit in Chicago. This year’s theme, “The Next Big Idea,” fit perfectly into our distinction as investment professionals. Our Big Idea is that tactical investment strategies are a necessary component to any diversified portfolio.
As we heard several times at the Conference, adding alternatives (tactical) can reduce volatility and enhance return over time. There has been 21 percent annual growth in liquid alternatives (mutual funds and ETFs) since 2005, with many investment instruments now available to construct flexible, tactical portfolios. A good place to start is with our White Paper Understanding Tactical Investment Strategies.
This Conference helped advisors understand what the drivers of return are for a diversified portfolio. It was mentioned several times that clients don’t need to fully understand each strategy, but they need to know that their advisor understands the strategy. As leaders in tactical investment strategies, we are pleased that advisors are increasingly looking for new and creative ways to mitigate risk while participating in market upsides.
As soon as you stop wanting to be coached, taught, or mentored, you’re in trouble. In describing his move to the Denver Broncos after his neck surgery, he said he had to find a new way move the chains down the field. Likewise, with the ever-changing markets, an advisor must adapt and make adjustments for clients.