Are alts really as new as we think?
While alts have long been the purview of the accredited investor, Salzer says more and more options exist for retail investors to come closer to his 60/40 mix. He says gold can play a serious role for investors in the current environment considering the likely years of money printing we’re going to see from governments. Bitcoin, too, he says is a totally uncorrelated and unrestricted asset that can drive performance if used right.
Salzer also wants to flip the script on alts vs. “traditional” investing. He notes that buying gold or buying into private lending has an investment history going back millennia. Where ancient Romans hoarded gold and medieval Venetian merchants loaned money for trade voyages, the idea of a stock exchange is only about 300 years old. In Salzer’s view alts investing and private assets should not be considered all that novel in the broad sweep of economic history.
Salzer says one of the biggest opportunities for alts investors is in private debt. He sees huge spreads in private debt. If an advisor can find best in class lenders that can underwrite and lend money properly and that know how to collect when difficulties arise, the advisor can find a true winner for their client in an age when “traditional” fixed income is so unattractive.
Salzer says that even advisors skeptical about alts should get informed as best they can. They should take opportunities to learn, even if it’s just to fully understand why they’re saying no. For an advisor, educating yourself equips you to better educate your client and have an informed discussion about why alts may or may not work for them. He says the advisor connect event is an opportunity for advisors to gain that knowledge.
“It's always good to know what other advisors are thinking or doing,” Salzer says. “It's not always about agreeing with them. It can be about disagreeing with them or saying I think they're on the wrong track. It could be being exposed to ideas that you haven't considered before. So the more knowledge that you have, the better you can serve your clients. Knowledge is power.”