Why You Should Own Liquid Alternatives in 2017

Straight-up stock index funds have been hard to beat since Donald Trump's victory on Election Day. But investors better not dump their less volatile alternative funds too quickly because risks remain in the market, said John Culbertson, president and chief investment officer at Context Asset Management. Culbertson believes the market is not well positioned to adjust to inflation and that the economy could be experiencing a major inflection point. If his thesis proves correct, then it could take years to unwind the quantitative easing policies in the U.S., Europe and Asia. Risk assets, such as developed market equities and credit, moved lower following Brexit while high quality bonds moved higher. Although both Brexit and Trump's election were unexpected, the response to Brexit was very short lived while the Trump response continues to persist.