Barry Glassman, CFP

Barry Glassman, CFP®

His vision for starting GWS was to deliver investment strategies and wealth management services typically available at the highest levels of wealth. Today, clients benefit from these sophisticated financial services targeted to meet their unique needs.

The Washington Business Journal recently asked Barry Glassman for his advice when it comes to branching off into alternative investments.  Here is a recap of his response:

In order to choose the right alternatives, investors should explore the why, how and what:

First, why are you investing in an alternative? For most alternative strategies, the answer is either lower risk or low correlation. In the case of lower overall risk, managers who have the ability to short, or bet against some stocks in the portfolio, typically do so to lessen the downside in case of a severe downturn in the markets. Trend-following managed futures strategies may be as volatile as stocks, but most have low correlation to stocks and bonds. In testing why you own a strategy, a good proxy of diversification was its performance during the 2008 financial crisis.

Several years ago, the how was easy, as an illiquid hedge fund was virtually the only choice. Today, many funds have simplified their ownership structure, lowered their fees, expanded the potential for liquidity, and dumped the K-1 form for a simplified 1099 when it comes to reporting taxes. In other words, don’t get hemmed in by any onerous terms of a hedge fund – ask your financial advisor for what other alternative options might be out there.

As far as what to own, I suggest deciding on a strategy first. Then decide what to own, whether it be a hedge fund, mutual fund, ETF or separately managed account. Keep in mind that each may have their own advantages and disadvantages and many financial advisors are limited as to which they may recommend.


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