The significant shift by a growing number of investors, from traditional stocks and bonds to alternative investments, was clearly illustrated recently when Bank of America Merrill Lynch announced that their sales of private-equity offerings rose 70 percent; through late October 2012. The bank also stated that it fully anticipates its alternative investments division to continue expanding, all the while adding even more alternative options for investors looking to rethink their traditional investing strategies. Many global money management firms now view investing in alternatives as an important part of a profitable financial portfolio, and this philosophy is beginning to gain worldwide appeal.
Changes in the investment markets in recent years, has made investing in alternatives more accessible and the investment community has just begun to capitalize on the profitable opportunities available to them; from investing in shipping containers to precious metals, real estate and/or gemstone investments. The head of global wealth and retirement solutions at Merrill Lynch, Andy Sieg, stated: “In the past, you needed to have clients who were really comfortable with the fact that (traditional) investments were illiquid.” He continued by saying that, “clients who are seeking the diversification that comes from alternative investments, can invest in them and maintain liquidity. It broadens the set of clients for whom these are appropriate.”
According to a recently released industry study, assets in global alternative investments had already increased to a record $6.5 trillion by the end of 2011. This represented a growth rate that was more than 7 times the rate of traditional investment strategies, over the same five year period. Analysts predict that by 2015, alternative investments will rise in popularity and account for more than 25 percent of retail revenues, almost doubling the rate of 13 percent that was recorded back in 2010.
Given the performance of alternative investments is recent years, it looks as though this investment trend will continue for many years to come, well beyond the expected completion date of the Panama Canal expansion in 2015, when the world begins to enjoy the prospers of a global economic boom.