Yield-starved investors should be exploring less traditional opportunities

May 23, 2022

By George Prior

Now is the time for investors to consider diversifying into less traditional asset classes, affirms the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The assessment from deVere Group’s Nigel Green comes as global stocks continue to experience turbulence.

He says: “The three major equity indexes on Wall Street are experiencing their worst stretch of losses in decades, and this is being echoed globally.

“It comes amid investors’ concerns over inflation, which is forcing central banks to slam the breaks on their economies, the ongoing war in Ukraine, Covid lockdowns in China’s manufacturing heartlands known as the ‘factory of the world’, and some household name companies posting weak results.

“This backdrop is creating a yield-starved environment for investors.”


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He continues: “As such, for those looking for both capital appreciation and capital preservation, now is the time to consider diversifying into less traditional, return-enhancing asset classes.

“These could include venture capital, structured products, cryptocurrencies, high dividend stock, hedge funds, managed futures, and direct real estate, amongst others.”

“Such investments could also be useful tools to improve the risk-return characteristics of your investment portfolio. This is because they increase diversification and reduce volatility, due to their low correlations to more traditional investments such as stocks and bonds; and they can hedge some portfolio exposures.”

However, says the deVere CEO, considering that these investments are often more complex than their traditional counterparts, working alongside a good fund manager will likely be critical to ensuring return-boosting results.

He goes on to say that whilst less conventional asset classes should also be considered, investors should remain invested in the traditional markets too “because financial history teaches us that stock markets go up over time.”

Nigel Green concludes: “Yield-starved investors should explore less traditional opportunities, not only for potentially higher returns, but also as they provide diversification and downside protection for their portfolios.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

 

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