Posts belonging to Category Nontraded REITs

Front-End Bonus Payments May Need To Be Disclosed


If your broker or financial adviser told you he was moving to another brokerage firm and asked you to move your account there, would you want to know if he was being paid thousands or millions of dollars to make the move?  The Financial Industry Regulatory Authority (FINRA) thinks so, and is proposing a new […]

Alternative Investments – Big Problems


According to financial advisers, do not be fooled by the recent market in stocks into believing that we are in for a continuing period of sustained low volatility.  Those advisers want you to expect lots of volatility and market corrections and to invest accordingly. In light of the foregoing, investors should adopt alternative investment strategies […]

Regulators Focus on Complex Alternatives


The Financial Industry Regulatory Authority (FINRA), as well as the SEC and state regulators, have announced that they are concerned about broker/adviser sales practices involving alternative investments including variable annuities and equity-indexed annuities. They have the distribution of these complex products on their radar screens.  On January 11, 2013, FINRA sent a letter to its […]

Investors are Gorging on Junk Bonds


Prices of “junk” bonds keep rising as investors continue to buy the riskier debt.  Yields on junk bonds, which move inversely to bond prices, settled at a record low of 5.56% recently.  Demand for junk bonds is part of the yield-seeking behavior recommended by advisers to many fixed income investors, as they venture further out […]

Structured Products Pose Major Risks for Investors


Danger lies ahead for investors in structured products. Structured products were once used only by institutions and sophisticated investors that had the education, training and experience needed to fully understand these complex and opaque alternative investments.  Over the past several years, however, structured products have been sold to individual investors, who do not understand the […]

Alternative Investments are no Panacea


Why do investors continue to be enamored with hedge funds and other alternative investments? The press recently reported that institutional investors are expected to increase allocations to hedge funs by 300% this year, and hedge fund assets are expected to increase by 11% to $2.5 trillion, according to the 11th annual survey of institutional investors […]

Bond Market – ‘Irrational Exuberance?’


Recent warnings regarding dangers in the bond market were recently issued by bond maestro Bill Gross. These warnings are reminiscent of Alan Greenspan’s implicit warning in a 1996 speech when he asked: “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?”  Specifically, Mr. […]

Low Yields Push Investors into Very Risky Alternatives


The financial world continues to beat the drum warning investors about the risk of bonds.  When interest rates rise (or when the market believes a significant rise in interest rates is imminent) bond prices will fall, and investors in bond funds and individual bonds will suffer declines in value and/or losses.  Retirees and others, who […]

Alternative Investments – Often Tainted by Sales Practice Abuses


Investors in search of fixed income have poured money into a variety of alternative investments, including nontraded real estate investment trusts (REITs).  Alternative investments encompass most investments other than traditional stocks and bonds and mutual funds that hold stocks and/or bonds.  There are three basic clusters of problems that investors who are considering these products […]

Alternative Investments Begin to Haunt LPL Financial


LPL Financial, the country’s largest independent broker-dealer, is encountering serious problems involving its sales of alternative investments. LPL is also (not coincidentally) one of the country’s largest sellers of alternative investment products. In 2011, LPL sold $758,435,677 of variable annuities (which are considered by most industry observers as being alternative investments) and $110,643,148 of other […]