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Lack of Understanding Does Not Negate Interest in Alternative Investments

Lack of Understanding Does Not Negate Interest in Alternative Investments

A recent Spectrem Group Perspective™, Alternative Investments: Are they a priority for Affluent portfolios?, uncovered a trend that indicates that alternative investments are not well understood by the affluent.

Only 18% of wealthy investors indicate they comprehend Hedge Funds. Half of wealthy investors have no understanding of Structured Products and Private Placements. This may stem from the fact that the Affluent have less exposure to these types of investments than other options.

 

Percentage of Income Contributed to Retirement Plan

Despite their admitted lack of understand about alternative investments, 30% say they would be interested in an investment product that has similar risk and return as the stock market, but is independent of the stock market movements. Of those attracted to alternatives, 72% are interested in Hedge Funds specifically. The key groups to approach about these alternatives are younger investors, those under 45, and business owners, who are traditionally more open to diverse investment options. An unexploited opportunity exists to diversify the portfolios of the Affluent investor.




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