Concerned about their financial futures, more and more investors are turning to alternatives to stocks and bonds than they were 7 years ago – and the change seems to be paying off.
A recent article
in Financial Advisor Magazine
cites a report from McKinsey & Company, which found that alternative investments have been well outperforming traditional ones:
Despite poor performance, illiquidity and serious redemptions during the financial crisis, alternative assets grew at a 14.2% compound annual growth rate from 2005 through 2011. That compares to 1.9% growth for non-alternative investments.
The article goes on to explain that many investors, finding that their retirement is underfunded, have been seeking out ways to diversify their portfolios to try to fill that funding gap. As a result, the amount of investment money allocated to alternatives has trended upward in the past few years.
More than $4.2 trillion* of the money invested in alternatives comes from a funding source many might not have considered: self-directed IRAs
. Investors find this strategy attractive because they’re not taxed on the profits that come from the investments.
Discover how you can take control of your financial future
with self-directed IRAs.
*Investment Company Institute