The Other Path reveals lucrative alternatives to traditional investments to investors

In the other wayRobert J. Klosterman’s follow-up to The four horsemen of the apocalypse, the author returns to offer his astute financial and investment advice. The subtitle of the book, “Lighting the way to volatility while achieving equity-like returns“It’s fitting, since that’s just what Klosterman advocates for investors to do to achieve optimal monetary gains from their investment portfolios. Klosterman gets its title from Robert Frost’s famous poem, “the road not taken“, which he quotes at the beginning of The Other Path, a very interesting book that offers investors information about a different type of investment approach than what they might be used to, although it is very effective and designed to help investors earn capital Create returns while reducing the volatility experienced by many other investors who only try more traditional approaches when it comes to planning their portfolios.

klostermann’s book the other wayIt is relatively short, at only 60 pages, not counting the Appendices at the end, but his investment approach that he details in it is very informative. The book is sure to interest and be beneficial to anyone who wishes to reduce their investment risks while maximizing their potential monetary return.

The very title of Klosterman’s book, the other way, refers to a strategy or investment path that most people have traditionally followed, which consists of investing their money entirely in stocks, bonds and cash. Such an approach is a tried and true one that has proven beneficial to many investors, but has also proven to be a sometimes volatile path for others. Investing in stocks, bonds and cash, Klosterman argues, is an important part of an overall investment strategy, although there are other opportunities to diversify investments and reduce the volatility that many portfolios unfortunately experience, volatility that can cause the money value of one’s wallet. experience a disastrous nosedive.

Still, the main leg of the milk stool, that is, investing in stocks, bonds and cash, is a vital component in a wise investment strategy, according to Klosterman’s assessment in the other way. He calls it the central leg of a three-legged metaphorical milk stool, with each leg in the metaphor referring to a different but complementary strategy when it comes to investing. If an investor diversifies their portfolio and doesn’t focus solely on the main tranche of stocks, bonds and cash, but also invests their money in non-traditional ways, Klosterman argues, using a series of helpful and informative charts and graphs, the portfolio of one is much less likely to experience a disastrous financial loss and the volatility of one’s portfolio will be reduced.

The second of the three legs of the milk stool is “Diversifiers” and the third leg is “Absolute Returns”. Klosterman argues that “diversifiers,” or alternative or non-traditional investments, help reduce the volatility of an overall investment portfolio. Some examples the author gives of nontraditional investments include real estate, private equity, “emerging and developed international stocks,” distressed debt, and managed futures. These types of non-traditional investments can reduce volatility by having “very low correlation to traditional markets,” as Klosterman writes, or by generating “consistent returns year-over-year, with little or no volatility.”

The third leg of the milk stool, “Absolute Returns”, is also the name of Chapter Four of The Other Way. Absolute returns are investments, according to Klosterman, that “demonstrate the same qualities of a bond with the guarantee of return of principal and constant payment of interest.” The author writes that they are similar to ten-year Treasury bonds, but “are not backed by the full faith and credit of the United States.” Despite this, Klosterman claims that the absolute return aspect of the vehicles can be considered an advantage. This is because strategies involving absolute return vehicles, as the author writes, “can invest in sound ideas and not have to adjust to the restrictions that other institutions have.”

One example is investing in companies that lend money to small businesses and home lovers. These companies can work fast and close loans faster than banks. These companies have the ability to give people like real estate developers or home builders quick access to money loans, compared to banks.

In the other way, author Robert J. Klosterman writes about a sensible approach to non-traditional investing and how it can benefit the investment portfolio and help reduce volatility. The book also examines and identifies “signs of trouble” in addition to volatility when planning portfolios, such as groupthink, market disruptions, and inflation. While Klosterman recommends that investors take the advice of professionals who are experts in investment portfolio planning and have a proven track record of at least a decade, The Other Path is an interesting and insightful look at how to add non-traditional investments to your an individual’s portfolio. Whether investors want and like to plan their investment strategies themselves or with the advice of professionals, the other way is an eye-opening must-read designed to inform investors about the types of alternative investments that can balance their portfolios and reduce the negative effects of market volatility. It is a book that I would highly recommend to anyone who has ever considered expanding their investment portfolios and adding non-traditional investments to them.