With more uncertainty in the markets, affluent investors are considering the alternative asset class with good reason. Asset allocation strategies are evolving among the affluent to go beyond garden variety stocks, bonds and cash. Many are seeking unconventional strategies to increase and stabilize their overall portfolio.
Attracted by the income generating ability and low volatility of some alternative investment classes, investors generally recognize the negative correlation with Wall Street as the tipping point in their decision to consider this asset class in the allocation equation.
The long bond yield is less than inflation, so as an investment it’s a guaranteed loser, yet reluctantly money still flows. We’ve already seen the equity markets go from euphoric highs to ominous lows with extreme volatility in between. There is more money in cash today than ever before. Why? Because Investors are concerned about the uncertainty on Wall Street and inevitable inflation.
Thus, more than ever, the affluent investors have begun to explore alternative assets as a way of stabilizing their portfolio, generate positive returns, diversify their risk and gain a footing to avoid any further losses.