BOSTON — As the markets continue to get back on track, investors may shift towards those investments that speak directly to their liquidity situation.
According to a Celent report, Market Updates and Investment Trends: Where the Money Is Going, the dominant theme is the right asset for the right investor, with an investment structure tailored to the underlying liquidity situation and investor's time horizons.
"Liquidity and risk premium were significantly undervalued leading up to the crisis," said Isabel Schauerte, an analyst with Celent's Securities & Investments Group and co-author of the report. "Liquidity has been taken for granted. That can't be the case any longer. Investors will demand an appropriate premium for illiquidity going forward."
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The retail investor segment, especially the mass retail or middle class markets, are certain to grow in importance, sophistication, and demand, Celent noted. Active investors may be more inclined to pursue high yield strategies to support longer life spans.
"For long-only investors, the push into alternative instruments, strategies, and vehicles currently seems somewhat out of tune with investor sentiment," Celent said. "Investors will have stronger risk aversion for a year or two to come, which means we will see a period of greater financial conservatism in asset management."
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