The investment-management industry is undergoing arguably its most disruptive period ever. Thanks to a new wave of disruptive technologies, the very concept of investing is being transformed from a practice that was relationship-driven
Alternative is a broad term, taking in whatever is different from the conventional. In investments, that means anything that isn’t stocks, bonds or cash. It’s a large playing field that is attracting an increasing number of investors, including some of the wealthiest in the world. Returns can be high, but so can risks; what are some of these diverse investment opportunities and of what should the shrewd investor be cautious?
The wealth-management industry is in the midst of some seismic changes at present. The traditional channels through which money has been managed and advice dispensed are now being decisively disrupted. And as a result, those who are being affected the most—from multi-billion-dollar hedge funds to retail investors managing their own portfolios—are now operating in an almost entirely new landscape.
Following on from our recent piece, “Five Industries in Which to Invest in 2019”, we now turn our attention to some of the most promising individual stocks within those industries. Looking forward to 2019, each one of the five sectors certainly appears to have some winners.
Despite the record-breaking highs achieved by US stock markets, 2018 is ending with virtually all those gains wiped out. And it’s not just the United States that has suffered. Germany’s DAX, the United Kingdom’s FTSE 100 and Japan’s Nikkei 225 are all ending the year firmly in the red.
The buy side of the investment world is constantly looking for new methods to generate alpha, the metric that represents the active return on an investment versus the performance of a broader market index or benchmark.
It would be so much easier to make money on investments if one knew for a certainty the end from the beginning. While economic forecasts can be helpful, they should be viewed with caution and even scepticism by shrewd investors, even when the source has been right “most” of the time—most of the time is still short of all the time.
The $3 trillion hedge-fund industry is clearly losing its appeal as it delivers progressively lower returns to investors. According to data released by Preqin, a provider of information on the alternative-asset industry, hedge funds yielded average returns of 12.22 percent in 2013, 4.65 percent in 2014 and only 2.02 percent in 2015.