With the new year around the corner, investors across the globe are preparing their resolutions and setting new investing goals. Many are choosing to leave their traditional investments behind, and instead invest in alternatives in 2018. Moreover, a growing number of investors are leaving their money managers and financial advisers, to manage their own investing portfolio and choose their own investments. These two trends could cause an upheaval in stock and bond markets in 2018.
It is the continued economic uncertainty and the constant threat of war in Asia and Europe, that has much of the investment community reassessing their tolerance for risk. In doing so, many are choosing to lighten their risk burden for 2018. This has lead to the increased popularity of alternative investments and an exit from traditional investments.
The fact that these new options/alternatives have a low correlation to stocks and bonds, makes them very appealing to investment-seekers. Both the daily volatility that accompanies Wall Street, and the overhanging risk of bond losses due to inflation, has grown tiresome. This has prompted investors to seek-out viable alternatives to introduce to their portfolio.
Since 2008, an increasing number of investors have been seeking information about investments outside of the traditional choices. The trouble is that financial advisers are not appropriately educated to guide investment-seekers through the alternative landscape. They are programmed to “sell” the well-established investments, like stocks and bonds.
If you are making the resolution to lower exposure to traditional investments, it is recommended that you seek investment advice from investors who have first-hand experience with alternative investments. These people are in the best position to relate the positives and negatives of pursuing an alternative investing strategy.
Undeniably, risk is an important part of investing. Although investors know that they must accept a degree of risk when making investments, they do not have to take unnecessary risks. For investors, 2018 is about eliminating needless risk with traditional investment alternatives.