Alternative Asset Analysis (AAA) says it supports calls from expert speakers at this year’s InvestmentNews' Alternative-Investments Conference in Chicago for all investors to put cash into alternatives.
Keynote speaker James K. Dilworth of Simple Alternatives LLC told delegates at the event: “Every adviser should allocate some capital to hedged equity.” He added that alternatives can help investors to “generate returns on the downside” as alternative asset classes are less closely correlated with equities and other economic factors that can lead to major losses that can occur during times of economic crisis.
AAA, a research and analysis group that advocates alternative investments, said that since 2008, when many investors lost money on their stock market investments, pressure has been mounting on retail fund managers to increase exposure to alternative asset classes like hedge funds, commodities, real estate and forestry.
AAA claims that forestry is a popular asset class as it has averaged much stronger returns over the past decade or so than the stock markets, while remaining one of the more ethical investment choices. Some forestry investment firms, like Greenwood Management, for example, help reduce deforestation in densely forested developing countries by providing an alternative to timber from native trees.
Analysis partner at AAA, Anthony Johnson said, “We welcome the support shown by the experts at the InvestmentNews conference for alternative assets. In these uncertain economic times, it is wise to spread the risk in an investment portfolio by putting more cash in alternatives.
“Opting for an ethical choice like sustainable forestry investment is, we believe, the right choice for the modern investor with a social and environmental conscience," he added.
The delegates at the conference spoke largely about the advantages of hedge funds, but accepted that these also usually come with higher fees for investors, unlike other alternatives such as foreign exchange investments and forestry.
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