Snyder Asset Management

What are Alternative Assets and Should You Be Incorporating Them Into Your Portfolio?

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True Diversification and Methodical Risk Assessment

As you look at portfolio diversification as a hedge against market volatility, Philip Snyder, CFA, has a very interesting idea for you to ponder: Portfolio diversification should not be limited to merely owning a myriad of stocks and bonds.

Real portfolio diversification, Snyder will contend, lies in a diversification of asset classes.

Philip Snyder, CFA, is President at Snyder Asset Management, LLC, a wealth management firm that routinely looks beyond stocks and bonds to incorporate Alternative Investments with the intention of creating investment portfolios that may withstand market volatility while generating returns that help meet clients’ financial goals.

In Snyder Asset Management’s selection of alternative assets, attention is paid to assets in both the public and private sectors. An example of a public alternative asset is Gold, while private alternatives include private equity and global real estate just to name a few. Private assets tend to have less liquidity than public assets, but may also have less volatility and lower correlation to equities.

Snyder suggests that portfolios that contain 15 - 25% of carefully selected alternative assets can produce less fluctuation in performance. Snyder says “An investor’s goal should be to generate the highest return for the least amount of risk. We invest in Alternatives with the objective of accomplishing this goal.” The selection of alternative assets is guided by Snyder’s own expertise and the use of cutting-edge software (Riskalyze) that assesses the risk tolerance of clients alongside the risk level of their portfolio.

The “Institutional Approach”

Philip Snyder was first inspired to take this approach to investments by looking at how institutions, such as colleges and universities, managed their endowments, marbling sizable portions of alternative assets into their portfolios to create stable growth that was more resistant to the ups and downs of the market.

He noticed that when The Standard & Poor’s 500 Index saw declines from 2007 through 2009, investments in certain alternative assets was less volatile. Meanwhile, Snyder also noticed sentiment among individuals who valued stability and risk aversion over aggression and risk-filled maximization strategies. He incorporated Snyder Asset Management in 2016 to serve people who value steady growth and stability. Snyder leverages his knowledge of institutional investments, portfolio construction, and metrics from Riskalyze to deliver optimal strategies to clients.

“I use my knowledge and experience to help clients navigate challenging markets,” Snyder says, “while striving to remove emotion from the decision making process.”

“By combining alternative assets with a traditional Stock/Bond portfolio,” Snyder says “An investor can strive to reduce volatility and provide more stable returns. I strive to bring an institutional approach with respect to wealth management to the individual investor.”

This approach is not yet common in the field of wealth management, but is very common in the world’s most abundant endowments. This sort of entrepreneurial thinking can give investors the edge they are seeking as they evaluate potential advisors who can serve their needs.

Ethics In Practice

Philip Snyder is a Registered Investment Advisor which means that he has a fiduciary duty to do what is in the best interest of the client at all times. “Not,” Snyder says, “just what is suitable.”

Snyder is also a Chartered Financial Analyst charterholder and necessarily adheres to the CFA Institute Code of Ethics and Standards of Professional Conduct. Snyder chose to pursue this certification because, in his words, “I liked the fact that the curriculum focused on investment related material such as equities, fixed income, portfolio management and most importantly, ethics.”

To this end, Snyder was also quoted in an article in the Wall Street Journal in early 2018 by Jason Zweig about how advisers at certain discount brokers are incentivized to sell higher-priced products. This article served an important role in raising the awareness of the methodology that goes into certain brokers’ recommendations, empowering consumers with necessary information as they consider recommendations.

In addition to upholding high ethical standards, Snyder possesses the ability to explain complex concepts in a way that makes them easily understandable. He understands that investing is a foreign concept to many and therefore makes time to ensure that his clients understand concepts and have full confidence in the strategies proposed.

If you are looking for a Registered Investment Advisor who values ethical practices, steady growth, and innovative levels of portfolio diversification, Philip Snyder would love to talk to you.

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