You learned your lesson. After falling victim to the dot-com delusion of the go-go late ’90s, and the hedge fund and over leveraged real estate bonanza of the 2000’s, you decided to try to emulate the stock-picking superstars of yesterday who are now back in vogue. Guys like Warren Buffett and Peter Lynch, who compiled legendary investment records by buying and holding on to shares of companies whose businesses they understood and whose books they thoroughly analyzed. But more than 6 months into a bloody bear market, that sensible strategy probably isn’t working for you either. Despite the market’s recent revival, many investors will remain impatient until all those battered portfolios are back closer to even. So it’s understandable that you might consider toying with some alternative strategies.
Larry Swedroe, author of “The Only Guide to Alternative Investments You’ll Ever Need,” says that while the market has investors looking for new and different ways to protect themselves or grow their assets, many alternative strategies – including hedge funds and equity-indexed annuities – are flawed and don’t belong in the typical individual’s portfolio ever.