Thursday, 21 November 2013

Recent Survey Says Traditional Investment Portfolios Are Dead

The Natixis Global Asset Management Global Financial Advisor Survey was conducted by CoreData Research in August and September 2013 and included 1,300 advisors worldwide. The report concluded that traditional investment portfolios are not what they used to be and because of this, an increasing number of investors are turning to the alternative asset class. Much of blame for this continuing disappointment can be attributed to the current state of the global economy, and its ongoing influence on stocks, bonds and real estate. The survey also revealed that approximately 70 percent of the advisers asked, reported that traditional portfolio diversification techniques must be replaced with new approaches. This figure is way up from a year ago (2012), when less than half (46 percent) where in favor of investing money in alternative investments.

Furthermore, the president and CEO of Natixis, David Giunta, believes that alternative investments offer some protection from volatility, and have proven to be a healthy way for investors to balance the need for retirement income with continued asset growth. Nevertheless, about 20 percent of the surveyed advisers claimed they had not used alternative investments, because their clients were afraid of them or knew very little about their performance. Prior to alternatives rising in demand post-2008, they were only known to wealthy clients. Because they were a carefully guarded investment secret, nowadays advisers must educate their clients, before investing in them.

Albeit a learning experience for most investment-seekers, alternative investments are rising in demand among advisers and investors alike. This is primarily because of their proven ability to improve investment returns while helping to reduce exposure to unnecessary risk. Investors have become well-aware that these are two things that traditional portfolios - consisting of equities and fixed-income vehicles, cannot deliver; particularly in a volatile market. Thus, as the investment community looks to the future, it appears traditional investments have become a thing of the past.

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