So if bonds are marketed in a nominal zero environment and stocks haven’t moved in more than five years, what can an investor do to think differently? I can suggest or even strongly encourage investors to look at alternative asset classes. Private equity, for example, provides an alternative strategy. Planners, advisors and investors could benefit greatly from thinking outside of the box of stocks and bonds. As the head of a private equity firm here in town, I am telling you yield is being produced handsomely in your own back yard.
I have heard it all, private equity is a scheme, it’s not insured in many cases, and if I hear another reference to Madoff I swear I am going to lose it. Across this country last year, one bank a week was seized. I would ask you to ponder how insurance assisted those institutions or kept them from being seized. If you don’t trust in or understand the investment, or don’t personally know who is making investment decisions on your behalf – that, to me, is scarier and more fraught with risk.
I would suggest investors press their advisors and planners or research private equity themselves. Prudence would dictate you seek a second opinion about a significant medical issue. I would think something as significant as your investments would have you wanting to ask more questions, and you might be amazed at what is happening in your own home town instead of New York City.
Russ Garrow is the founder of Garrow Equity. He can be reached at Email: firstname.lastname@example.org or 360.600.6466.