Young, rich investors are veering away from conventional choices such as stocks and bonds and turning to alternative investments to grow their wealth, writes Jeannine Mancini for Benzinga.
According to a new survey conducted by Lansons, less than 10 percent of the American population has invested in alternative assets. At the same time, younger generations are showing a significantly higher interest in alternative investments. Thirty percent of Gen Z and 25 percent of millennials are either investing in alternative assets or possess knowledge of platforms that facilitate such investments.
Furthermore, a Bank of America study revealed that 75 percent of Americans between 21 and 42 doubt they can achieve above-average returns using traditional stocks and bonds.
Do you trust the markets to take care of your future? In today’s economic environment, having options besides public stock, bonds, and mutual funds may reduce the risk in most portfolios.
Learn more about accredited investing and alternative assets.
Alternative investments that younger generations prefer include a diverse range of assets outside of the typical stocks, bonds, and cash. These encompass real estate, cryptocurrencies, and various commodities, among many others. While such investments are less liquid and often perceived as riskier, they offer the potential for higher returns.
According to Josh Passman, the CEO of Lansons New York, alternative assets such as wine, gold, and real estate are usually considered to be strong hedges against inflation.
Fred Hubler, the CEO and Chief Wealth Strategist at Creative Capital Wealth Management in Chester Springs and a Forbes.com contributor, has worked with alternative investments since starting his firm more than 20 years ago.
“I started to notice a few years ago that some of our clients who sought us out for our alternative investment access were younger than in previous years,” he said. “These new younger clients tend to be highly paid professionals or successful business owners and tend to want less stock-market uncertainty, so the use of alternative strategies fits their needs.”
One main reason for the rising interest in alternative investments among new generations of investors is the desire for diversification. Considering the increased volatility in the stock market and the related potential for significant losses, spreading risks across various asset classes makes for an appealing strategy.
Read more about alternative assets at Benzinga.
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