Alternative asset classes are included in small proportions to all Next Step Wealth portfolios in order to decrease expected portfolio volatility. Domestic and international real estate as well as indexed commodities futures may provide returns similar to those of equities while strengthening overall portfolio diversification.

 

The S&P GSCI Commodity Index provides an example of how the inclusion of alternative strategies can reduce portfolio volatility. As you can see below, this diversified index had a tendency to zig when the S&P 500 would zag during the period from 1997 - 2007.