Alternative investing may make sense for investors who are interested in diversifying their portfolios. We believe that the better returns come from having a mix of investments across different asset classes. This investing management philosophy allows us to give our clients the opportunity to explore options outside of traditional equity and fixed income investments while building wealth.

*Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.


In broad terms, an alternative investment is anything that doesn’t fall into one of the categories of stocks, bonds or cash. Alternative investing is the umbrella term for investments in alternative asset classes or for alternative strategies for investing.


Alternative investments tend to move in different directions than the traditional stock and bond markets. That’s what makes them a good tool for portfolio diversification. During times of market distress alternative investments aren’t usually moving downward with the markets. The reduced volatility can make alternative investments less risky for our clients.

Alternative investing is a long-term strategy for wealth management. It can help investors hedge against rising interest rates or inflation.


Many firms may specialize in equities or fixed income securities. These may not be appropriate for your special circumstances. We look at alternative investments to ensure we take your entire situation into consideration.

These investments may include:


Real Estate Investment Trusts, REITs, are company that own, operate or finance income-producing real estate. These trusts usually focus on a specific sector of real estate. The money the REIT makes from rent or mortgage interest is paid as dividends to investors. The law requires REITs to pay out 90 percent of annual income in dividends.

REITs give individual investors the opportunity to own real estate within their portfolios. The dividends that are paid out by REITs are a steady stream of revenue for investors. And the dividends are higher than dividends paid by common equities thanks to a favorable tax structure. 


Private equity funds provide direct funding for private companies. Often those companies are in some kind of distress. Investor money is pooled together and an advisor to the fund uses the cash to make investments in a company.

Private equity fund investors may find that their investments may provide higher returns than the major indices. Investments like these that aren’t liquid and are held for the long-term may have a higher rate of return than investments that are short-term and very liquid.

The financial professionals at Pence Financial Group strive to uphold the Fiduciary Standard of Care. At all times when providing advice to a Client, our financial professionals must always act in the best interest of the Client. We place the interests of the Client above the interests of the Firm. We must act with the care, skill, prudence and diligence that a prudent professional would exercise in light of the Client’s goals, risk tolerance, objectives and financial and personal circumstances. Our financial professionals must comply with all objectives, policies, restrictions and other terms of the Engagement and all reasonable and lawful direction of the Client.

This material was created for educational and informational purposes only and is not intended as ERISA, TAX, LEGAL or INVESTMENT advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

Investing in private equity and private debt is subject to significant risks and may not be suitable for all investors. These risks may include limited operating history, uncertain distributions, inconsistent valuation of the portfolio, changing interest rates, leveraging of assets, reliance on the investment advisor, potential conflicts of interest, payment of substantial fees to the investment advisor and the dealer manager, potential illiquidity and liquidation at more or less than the original amount invested.

Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential liquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.


At Pence Financial Group our company is guided by the Pence Process. Let us put our process to work for you and your portfolio. Contact us and pursue your wealth-building journey with us.


We tailor our services and programs to your diverse needs, enabling you to remain focused on what matters to you. Whether you are starting out in your career, thinking about retirement, or own a business, we would like to help. We have a team of in-house advisors, supported by internal and external specialists.


Whether retirement is years away or right around the corner, we can help you to build a strategy that helps you to plan for the future you want.


Choosing a financial planner isn’t just about assets. Our skilled professionals are focused on creating strategies for your legacy and long term success.


We offer comprehensive tax planning services and look at the whole picture to create a custom tax plan that fits your unique circumstances.


Estate planning is imperative to a great succession. It is a way to protect your family, property and leave behind a great legacy.


We create and execute a focused and practical investment plan to help our clients work towards their unique goals.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss.

Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Pence Financial Group and LPL Financial do not provide legal advice or services.