Advisors also should be focusing on the next generation of investors, who look at finances differently than the older investor. “The next generation, which is going to be the beneficiary of a $70 trillion wealth transfer, is more open to a wider range of investments. Advisors need to be aware of that and be able to take advantage of it,” he said.
Modern portfolio theory, which grew out of the work of Nobel Prize-winning American economist Harry Markowitz, reflects the ever-evolving need to diversify, he said. “Modern portfolio theory is integral to sophisticated investor strategies today. Akin to the idiom ‘the whole is greater than the sum of its parts,’ it advocates for curating a portfolio that maximizes return for a given level of risk. It also centers on broad diversification and choosing asset groups with little correlation,” Yieldstreet said.