With a diversified portfolio, alternative investments can complement more conservative investments and produce higher returns. This week’s news focuses on pockets of opportunities, such as in multi-asset absolute-return funds, smaller hedge funds and real estate.
According to a New York Times article, Seth Klarman has warned investors of high market valuations and of the adverse consequences of President Trump’s policies. In other news, we look at the prospects for REITs, crowdfunding and other investments.
With President Trump continuing to make waves in the market and the Federal Reserve holding on interest rate hikes, investors should prepare for changes. Let’s look at whether clients should overweight U.S. allocations and which sectors income-oriented investors should favor.
Using alternative investments allows investors to hedge against changes in the market and still see positive returns. Commodity ETFs and real estate investments offer investors options outside of traditionally “safe” investments. The rise of popularity in alternative investments has led to the acquisition of many smaller, specialized firms with specific industry knowledge that claim to understand how to best profit from the many asset classes.
Finding opportunities outside of traditional investments offers advisors unique ways to diversify portfolios. Crowdfunding is a way to participate in real estate investing without the traditional capital investment required. With the uncertainty of the new administration’s impact on policies, investors need to look for ways to reduce risk and increase growth.
The upcoming press conference with president-elect Trump could offer insights into policy changes and the domestic and global effects. Looking back at historical data and market cycles can help investors make sense of what might be changing in the new year. With positive returns last year, having strategies for a diversified global portfolio could help continue growth, even in unknown conditions.
The volatility of the domestic and global market creates an opportunity for investors to diversify portfolios. With the uncertainty of the new administration’s effect on trade, looking to global funds can help reduce overall risk in a portfolio. However, investors need to understand the political impacts on certain industries and currencies. Investors should also look at the potential risks associated with actively managed global funds to create a long-term growth plan.
Volatility in the market can make profitable investing a tricky task. It is important to understand the different investment options and the associated risks. With new research challenging traditional investing fundamentals, it is more important than ever to look at which strategies are available and how they can help create a diverse, flexible portfolio.
The new year brings an opportunity to reassess growth-oriented investments and take advantage of new opportunities. Looking ahead to possible policy changes will create a sustainable portfolio in a volatile market. It is also important to understand the needs of the younger millennial investors and their increased attention to social impact investing.
Growth stocks often lead to large returns but they require researching and understanding the industry and company before investing. Investors should look ahead to likely policy changes with the new presidential administration and their potential long-term effects to create a sustainable portfolio.