Some people see the investment universe as divided into just two classes of assets: core investments and alternative investments. Others prefer to view the asset allocation world as having three categories: core assets, diversifiers and alternatives.

Diversifiers are not traditional equity or fixed-income asset classes, but they have a long-term record of performance showing them to be valuable in a well-diversified portfolio. Among alternative assets, the jury is still out. Yet there are signs that these asset classes might be used selectively as satellite positions around a diversified core portfolio.

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