Alternative Investments – Clearly not an Option for the Average Retiree
Recent initiatives pursued by the Trump Administration have promoted and encouraged individual investors to consider purchasing alternative investments in their investment and retirement accounts. Good idea? Not really. Alternative investments are private companies that are not subject to the quarterly and annual reporting requirements of publicly traded companies who must abide by strict disclosure of SEC (Securities & Exchange Commission) rules and regulations.
Troublesome events occurring with these investments which can be problematic and result in valuation losses, are not required to be disclosed to investors. Further, unlike the shares of publicly traded companies which can be bought and sold in a matter of minutes on the publicly traded securities markets, alternative investments and private placements are often subject to liquidation and sale restrictions, whereby shares of these companies simply cannot be sold on short notice, with sale requests oftentimes subject to a lengthy waiting process.
Further, unlike publicly traded companies whose share valuations are reported daily, there typically are no such daily market valuations for alternative investments and private placements that can be accessed in the Wall Street Journal or online financial websites, so the investor in these investments oftentimes has no way of knowing whether their investment has gone up,losses down, or sideways, for that matter.
Additionally, alternative investments and private placements are subject to considerable management, administrative, internal commission and performance charges, all of which can serve to diminish the performance and profit of the underlying alternate investment. Further yet, some financial advisors motivated by high sales commissions have suggested to their customers excessive concentrations of investments in alternative investments to their customers with devastating losses and the inability to access funds.
We offer a free initial consultation to investors who have sustained unfortunate losses and lack of liquidity problems as a result of having been sold alternate investments. For an appointment, contact the Law Offices of Timothy J. O’Connor at tjo@tjolaw.com, star@tjolaw.com, or 518-426-7700.
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