Since the global financial crisis that occurred in 2008-2009, investors have taken a much more cautious approach to investing in traditional investments. Over the course of the last decade, their attention has been focused on moving away from the risks and poor performance associated with stocks and bonds, and instead they are adopting an investing strategy that includes exposure to alternative investments.
Motivated by the fear of another financial crisis, the investment community has grown fond of tangible, hard assets that have proven they can consistently deliver great returns; especially in adverse and uncertain economic times. If you invest in containers for example, the established lease agreement will provide a steady monthly return, that many investors use to supplement their income. Like any other commodity, shipping containers retain much of their value in times of crisis. This means they can be relied upon to strengthen your portfolio from any shortcomings resulting from your exposure to traditional holdings.
Aside from container investments, other hard, tangible assets include gold, fine wine, and real estate, to name a few of the most common alternatives. These investments are touchable and therefore more appealing and appreciable to cautious investors. In contrast, the stock and bond market is driven by vision. Stock prices for example are based upon forecasted profits, not actual revenues. Likewise, a country’s outlook can affect the value of their bonds. If investors lose confidence and do not share the company’s or country’s vision for predicted prosperity, the stock’s or bond’s value drops.
The allure of stocks and bonds have faded and investors are recognizing that they have alternatives.This, in partnership with the fact that private investors are ditching investment advisers and are taking control of their investment portfolio, means that a decreasing number of investors are relying upon traditional methods and strategies to fuel their financial success. That is bad news for the future interest in bond and stock markets.