ReSolve Riffs with Phil Huber on the Allocator’s Edge, Alternative Investments and Diversification

Phil Huber is the Chief Investment Officer of Savant Wealth Management, and author of The Allocator's Edge: A Modern Guide to Alternative Investments and the Future of Diversification. He joined us for a great discussion that covered topics such as:

• Educating advisors on the role of alternative strategies in portfolios and their benefits
• Recency bias and why “hindsight is 60/40”
• A different approach to building a truly balanced portfolio
• Why allocators find it difficult to diversify away from stocks and bonds, despite recognizing how expensive they currently are
• Dealing with an environment that most financial professionals have never come across in their lives
• Embracing alternative risk premiums and trying to understand why they work
• Private equity and hedge funds – the ‘gateway’ alts
• Niche vs large managers – why size matters and finding the sweet spot
• Path dependency and sequence of returns
• Communication challenges and getting clients across the line to embrace a novel approach
• Line item risk vs portfolio ‘gestalt’
• Fiduciary responsibilities, diversification, fees and behavioral considerations
• Behavioral coaching as an integral part of an advisor’s job
• A wide range of experiences and unrealistic expectations – why alternative strategies haven’t been fully embraced by retail investors
• In the absence of value, we negotiate price
• Overcrowding, passive-flows and factor underperformance
• The pitfalls of overly conservative assumptions
• Minimizing regret vs maximizing utility
• Plan vs planning – a perpetual, ongoing exercise

 

Thank you for watching and listening. See you next week.

 

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

 

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.