"Alternative" Investments to Survive This Economic Storm

Conventional portfolios of stocks and bonds will lag for years to come, says Rob Arnott. His two Pimco funds offer more focus on other assets.

Most investors buy stocks for growth and bonds to provide income and ballast for their portfolios. And that's about it. Rob Arnott thinks such a limited approach will result in wretched -- not to mention volatile -- returns in the coming years. "It's too narrow a focus," he says. "You need a bigger toolkit."

That’s because of what Arnott calls “the 3D hurricane:” deficits, debt and demographics. “Look at the headwinds coming the way of the developed world,” he warns. “And the U.S., in some ways, is at the center of the storm. I worry terribly about the economy and about how most people are invested. This is a time to be very defensive.”

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Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.