Bernstein Private Wealth Management Senior Investment Strategist Roosevelt Bowman joins Wealth! to discuss some key alternative investments to diversify your portfolio amid a mixed market outlook.
"When you look at where the biggest opportunity is, it really does come down to the kind of fallout from the bank stress. So, I mean by that is, you look at all of what happened last year with banks coming under pressure, further concerns about increased regulatory pressures. What do they have to do with this? Shore up their balance sheets? They also probably have to offload assets that they don't want to. That opens up a lot of opportunity for us, not being a bank, being able to look at these high-quality assets and buy them at steep discounts," Bowman explains.
He stresses the importance of finding value in volatility, highlighting equity investments as an area that will provide long-term growth. Bowman adds that debt investments have lower volatility and are a great way to diversify your portfolio. "If you think about something like private credit, where it's often floating rate debt, you're appreciating. You're going to enjoy appreciation in that strategy as interest rates move higher. That's a nice offset to what I would say is your long-duration exposure in your equity portfolio, where you're likely going to have a number of growth names that have a negative correlation to higher interest rates," he explains.
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