Posts belonging to Category Alternative Funds

Alternative Investments – Are They All They Are Cracked Up To Be?


Rising interest rates may be death to traditional bonds and bond funds, but a number of alternative investment strategies allegedly designed to protect principal in a rising interest rate environment are springing up to take their place.  It remains to be seen whether they will provide ballast when bond prices fall. For decades, bond investors […]

Alternative Investments Begin to Haunt LPL Financial


LPL Financial, the country’s largest independent broker-dealer, is encountering serious problems involving its sales of alternative investments. LPL is also (not coincidentally) one of the country’s largest sellers of alternative investment products. In 2011, LPL sold $758,435,677 of variable annuities (which are considered by most industry observers as being alternative investments) and $110,643,148 of other […]

Hedge Funds – Too Much Hype, Too Little Performance


The financial press is increasingly critical of an investment product it glamorized in the past ? hedge funds. As a group they have underperformed unmanaged stock and balanced fund indices for the last 10 years while enriching fund managers. Yet more hedge funds continue to come on line. The question is why do they continue […]

Insurance Companies Raise Red Flags on Certain Alternative Investments


The recent actions of errors and omissions insurance carriers should serve as a major red flag to investors. Many of these carriers are refusing to issue coverage for sales of certain alternative investments. In other words, these carriers have determined that the risk of loss associated with the sale of certain alternative investments is too […]

Alternative Funds – The Wrong Investment at the Wrong Time


Investors are being guided (some say pushed) into alternative investments at the wrong time. Many of these alternative investments are recommended by investment advisers. Many of these advisers have come to believe that they can cater to their client’s instincts to avoid equities by recommending alternative funds that use hedge fund-like strategies or watch client […]

Alternative Funds Underperform


Investors who put money in mutual funds that use hedge fund strategies are courting disaster or at least disappointment, according to Lewis Braham (“Serving Up Disappointment,” Bloomberg Markets). Hedge fund-like mutual funds are “today’s hottest yet least rewarding strategy,” he says. They use market-neutral, long-short, managed-futures and other alternative strategies. The long and short of […]

Many ‘Safe’ Investments Aren’t So Safe


Wall Street is adept at adjusting its marketing to the times and is never at a loss to pitch products, including those designed to play on investor fears. After all, that is what securities salespeople do. Many investments that Wall Street is currently calling “safe”, however, are actually both too risky and too costly, as […]

Hedge Funds Hit Hard by Commodities Investments


Slowing U.S. jobs growth, slowing growth in China, concerns about another global recession, and uncertainties relating to the Euro crisis, have turned commodities bulls into bears as hedge funds beat a hasty retreat from commodities for the third consecutive month, according to Businessweek (“Hedge Funds in Longest Rout Since Global Recession,” by Tony C. Dreibus).

Alternative Investments Are No Investment Panacea


Financial advisers need to know that dangers lurk in the complex world of alternative investments and they must disclose these dangers to their clients. At present, many investment advisers are under pressure to sell alternative investments and are doing so in greater numbers than ever before. Alternative investments can include virtually any investment that is […]

Floating-Rate Bond Funds May Not Be All They Are Cracked Up To Be


Investors need to be cautious when considering floating-rate bond funds. Such funds are attractive to investors because of their relatively high-yields and of their inflation-protection based on the fact that they are floating rate. With inflation running at 2.3 percent, and 10-year U.S. Treasuries paying 0.6 percent less than that, floating rate funds paying an […]