What is all-weather?

An all-weather approach is an asset allocation methodology that diversifies across geographic regions, asset classes, and investment styles. The goal of this multi-layered diversification can shield investors from the pitfalls of concentrated investing by relying on thoughtful preparation rather than unreliable predictions.

  • Endowment style multi-asset and multi-strategy diversification
  • Decades of proven resiliency across varied economic environments
  • Disciplined rebalancing between uncorrelated, independent assets

Why is an all-weather approach important now?

The current economic environment has the potential to expose portfolios to a wide range of market scenarios. Over concentration and limited diversification can unnecessarily endanger investors to downside risks during adverse environments.

  • THREAT OF SEVERE OR PROLONGED EQUITY MARKET DECLINES

    An all-weather approach is designed to target high single digit returns and has the potential for better downside management during periods of severe or prolonged equity market declines.

  • POTENTIAL FOR INFLATIONARY PERIODS LIKE THE 1910s, 1940s, and 1970s

    Increased exposure to asset classes not found in a typical portfolio, such as commodities and currencies, is designed to help investors prepare for potential inflationary periods like the 1910s, 1940s, and 1970s.

  • NEGATIVE REAL RETURNS FROM BONDS DUE TO LOW INTEREST RATES

    Investors may experience negative real returns from bonds. An all-weather approach can complement and even replace bonds as a potential risk reducer for the portfolio.

  • MANY ALTERNATIVES ARE EXPOSED TO THE SAME RISKS AS EQUITIES AND BONDS

    Many alternative strategies either lose money at the same time as equities or have little to no return. Historically, an all-weather approach has offered higher returns and greater diversification compared to most other alternatives.

Advantages of an all-weather approach

We believe using an all-weather approach is the most effective way to prepare for a wide range of market environments, while still producing competitive investment returns with limited downside risk.

  • Increased diversification

    Combines returns from equities, commodities, fixed income, and currencies across different geographic regions.

  • Stable Returns

    Seeking returns from a diverse set of markets can create low volatility performance, allowing investors to stay invested for the long term.

  • New Opportunities

    Provides exposure to markets and returns that may not be in typical portfolios.

  • Downside protection

    Can perform well in a variety of market conditions, potentially reducing risk without sacrificing return.

Important Disclosures

Standpoint Asset Management, LLC (Standpoint) is an investment advisor registered with the US Securities and Exchange Commission (SEC). For more information regarding the firm, please see its Form ADV on file with the SEC. Registration with the SEC does not imply a particular level of skill or training.

Investing in securities involves risk of loss that investors should be prepared to bear. Past performance is not indicative of future results. Diversification does not guarantee a profit or protect against a loss.

The views expressed herein represent the opinions of Standpoint and are not intended to predict or depict performance of any particular investment. All data provided by Standpoint including any reference to specific sectors is provided for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation, or recommendation to purchase any security. These views presented are subject to change.

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