Investors look to real estate and crypto as low interest rates persist

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A study by NexGen Cloud has shown that 43% of UK investors are more likely to consider alternative investments to make their money grow during this period of low interest rates.

A fifth of investors’ current portfolios are focused more on alternative investments than on traditional assets, with 23% saying that alternative investments will be a key part of their financial strategy over the next 12 months.

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Real estate has proven to be the most popular alternative asset among the 889 UK investors surveyed by the cloud solutions provider, with 17% already owning the asset and 19% considering an investment in the coming year.

Despite growing attention from regulators, cryptocurrencies took second place on the list of the most popular alternative investments, along with collectibles, with the support of 14% of investors.

Chris Starkey, Founder and Director of NexGen Cloud, said: “Over the past 18 months, financial markets have been subject to intense volatility, which, combined with record interest rates, is obviously driving investors to diversify. in new areas beyond traditional assets.

“Obviously, some investors are looking for ways to make their money work harder in today’s climate. However, it is also interesting to note that investors also choose to diversify into asset classes with which they feel more connected, which is a positive side of alternative investments which are often overlooked. “

For 30% of people surveyed by NexGen Cloud, alternative assets give them the opportunity to invest in specialized areas that they are passionate about and know better about.

But when it comes to investing in cryptocurrencies, a study from Oxford Risk found that nearly two in five investors have poor or no understanding of the asset.

Asset management in a low growth world

Research has also shown that demand for cryptocurrencies is driven by emotional factors, such as fear of missing out. More than a third of those polled said they had read huge price increases in the crypto market, while 15% said family and friends encouraged them to buy.

“The problem is that too many people buy blind without knowing what they are doing and are influenced to invest by the rising prices and others encouraging them to try,” said Greg B Davies, head of behavioral finance at Oxford Risk. .

“It’s worrying if people have substantial amounts invested in cryptos and don’t understand what they have bought.”

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