A new study by CAIS and Mercer shows that nearly 90% of advisors surveyed plan to increase allocations to alternatives over the next two years.
Traditionally, a portfolio model consists of 60% stocks and 40% bonds. However, the traditional model has come under significant scrutiny during the market and economic unrest over the past two years. But the current swing toward alternative investment strategies could represent a massive shift in portfolio allocation strategies, according to InvestmentNews.
Matt Brown, the founder of CAIS, shared that advisors are targeting a three-dimensional portfolio that more closely resembles a 50/30/20 model across stocks, bonds, and alternatives. Brown added that the findings confirm that "the great reallocation of capital into alternative strategies is well underway within the private wealth channel."
Technology is also making it easier for smaller retail investors to access alternative investments. Alternatives have become more democratized to where the average accredited investor can participate. Advisors must remain diligent in ensuring their clients understand alternative investments.
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