Understanding Alternative Investments and Risk Management

Posted on December 23rd, 2024 at 3:13 PM
Understanding Alternative Investments and Risk Management

From the desk of Jim Eccleston at Eccleston Law

Alternative investments once again are gaining traction, according to a recent article in InvestmentNews. To explain why, the publication interviewed Kirk Chisholm, a wealth manager and principal at Innovative Advisory Group. He sees the rise of alternative investments as a response to periods of market instability. According to Chisholm, when traditional markets like Wall Street lose investor confidence, alternative investments gain traction. InvestmentNews reports that this pattern has played out repeatedly, with different asset classes gaining popularity during economic uncertainty only to recede as markets stabilize.

Chisholm identifies the early 2000s as a pivotal moment when hedge funds surged in popularity. Investors were drawn to the hedging aspect, particularly during market downturns, only to lose interest as markets rallied. This cyclical trend continued with other alternative assets like managed futures, which similarly gained attention before becoming "watered down" by mainstream interest.

Chisholm sees private equity and private credit as the leading trends in alternative investments. However, he stresses a clear distinction between Wall Street’s alternatives and those found on the private side, which include real estate and private mortgages. Chisholm told InvestmentNews that these private investments tend to exhibit more stability, with investors remaining consistent in their focus despite market trends.

Chisholm’s perspective on risk is another key area of interest. He emphasizes that many investors conflate risk with volatility. Volatility, he explains, refers to short-term price fluctuations, while risk is the potential for a permanent loss of capital. According to Chisholm, true risk management involves identifying all potential risks, mitigating as many as possible, and accepting what remains.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

November 20, 2025
Supreme Alliance Fined for Failure to Supervise Variable Annuity Sales

The Financial Industry Regulatory Authority (FINRA) has fined Supreme Alliance $80,000 for failing to supervise recommendations and exchanges involving deferred variable annuities, as well as for failing to document background checks for newly hired registered representatives.

November 19, 2025
Lawsuit Accuses Inspired Healthcare Capital of Concealing Insolvency

According to news sources, a new lawsuit alleges that Inspired Healthcare Capital (IHC) and its CEO, Luke Lee, misrepresented the company’s financial health and concealed insolvency from a lender who extended a $1.5 million loan in late 2024.

 

November 18, 2025
Former FINRA Brokers with Misconduct Histories Flock to Insurance Industry, According to Recent Study

A recent academic study reveals that thousands of brokers expelled from the securities industry for misconduct nonetheless continue to operate under state insurance licenses, often selling annuities and other financial products to unsuspecting clients.