This past Thursday, we had the exciting opportunity to host a webinar with Currensee Trade Leader JCB FX Trading. Javier Colon, principal trader of JCB FX, conducted the presentation entirely in Spanish, his native language. The main incentive of his talk was to educate investors on the advantages of diversifying in alternative investments as a means of combating market volatility. Colon operates as a professional Forex trader out of Madrid, Spain; the epicenter of what could easily be considered the eye of the economic storm.
On the day of Colon’s webinar about the growing significance of alternative investments, an influential financial survey just so happened to be released simultaneously. The results shown were in perfect confluence with Colon’s insight. In a Business Wire press release, findings generated in the Elite Access Alternative Investment Survey conducted by Jackson National Life Insurance Company showed information gathered from the responses of over 2,000 financial advisers.
In an attempt to determine adviser’s current use of alternative asset classes and their needs from financial product providers, the survey uncovered a huge increase in their expected use of alternatives. The driving factors behind their interest in tapping this resource were to help negate potential market volatility and try to improve upon client portfolio diversification.
The survey found that within the next year, nine out of 10 advisers plan to increase allocations into alternative investments – with over half looking to do so by 15% or more, and a third aiming for 20+ percent.
The rest of the release details insight from Jackson executive vice president, Clifford Jack, who explains how over the last decade markets have seen record volatility. This has spawned an evolution in investment breakdown, which renders traditional 60/40 portfolio composites somewhat obsolete. A portfolio broken into thirds, with the inclusion of alternatives, is now becoming the norm.
One of the most prevalent themes the survey demonstrated was an obvious need amongst advisers for guided strategies in devising the alternative portion of client portfolios. Up towards 80 percent of advisors expressed they would be more likely to use alternatives if they were able to be to have some guidance in strategizing.
Being in the alternative sector of the investment industry, I sometimes take for granted the seeming “simplicity” of alternative investments and their related financial products. This survey demonstrated that despite their rapidly growing popularity, investments of these kinds are still emerging and thus require far more transparency. It is, however, very exciting to be right in the middle of the “traditional” investment portfolio makeup evolution. From the old 60/40, equities/fixed income breakdown, to the now evolving versions that include alternatives as an increasingly permanent fixture.
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