Investing in True Alternative Solutions with Peter Nakada

The Admired Advisor Podcast

Investing in traditional assets like stocks, bonds, and mutual funds has long been a popular way for people to build wealth. However, as the financial landscape has evolved, investors increasingly seek new and alternative investment opportunities to diversify their portfolios and achieve higher returns.

In this episode, Steve talks with Peter Nakada, Chief Marketing Officer at Stone Ridge Asset Management. Peter is one of the ILS markets' consummate experts, with an eye for opportunity, an analytical skill set, and an understanding of the motivations that bring investors to an asset class. As someone who explains complicated quantitative things simply to all kinds of audiences, Peter likes to call himself the Chief Explaining Officer.

As part of a firm dedicated to providing true alternative investment solutions, Peter talks with Steve about what alternatives are and how there's a difference between true alternatives and just alternatives. He also speaks about why it is important to seek more sources beyond stocks and bonds and what strategies and tactics can help people overcome the feeling of discomfort with alternative investing.

Key Takeaways

• [02:04] - How Stone Ridge serves investors and advisors.

• [03:52] - The key role Peter plays at Stone Ridge.

• [06:19] - The challenges of creating alternative funds.

• [09:15] - Overcoming the risks associated with stock and bond investments.

• [10:38] - One of the biggest challenges in investing in alternatives.

• [12:26] - The key to helping people overcome their discomfort with alternative investments.

• [20:39] - What distinguishes a good asset manager from the rest.

• [24:05] - The true nature of alternative investments.

• [28:48] - Why traditional alternatives have a checkered past.

• [33:24] - The red flags to look for when investing in alternatives.

• [39:08] - Peter's motivation for serving in the asset management industry.

Quotes

[02:39] - "Investors generally have most of their money in stocks and bonds. While that's very traditional, it's quite risky. The chance of a big equity market downturn hurting investors and having them struggle through retirement is real." ~ Peter Nakada

[09:15] - "People don't realize that an 80% down scenario is possible in the stock market, and if you suffer that at the wrong time, it would change your life." ~ Peter Nakada

[10:56] - "The biggest challenge in getting advisors or their clients to invest in alternatives is that people generally follow the herd. So, if most people are in stocks and bonds and you decide to do something different, you feel uncomfortable and out on a limb." ~ Peter Nakada

Links

• Peter Nakada on LinkedIn

• Stone Ridge Asset Management

• Morningstar

Connect with our hosts

• Steve on LinkedIn

• Buckingham Strategic Partners

Subscribe and stay in touch

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• Steve on LinkedIn

• Follow Buckingham Strategic Partners on Twitter

Disclosure

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Some analysis presented is based off current economic information and may become outdated or irrelevant without notice. Individuals should speak with their qualified financial professional based on his or her unique circumstances. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this podcast. © 2022 Buckingham Wealth Partners, LLC. Buckingham Strategic Wealth, LLC and Buckingham Strategic Partners, LLC (collectively, Buckingham Wealth Partners)