Young, wealthy investors are turning toward alternative investments as their main way of diversification.

Once again, let me stress: do not trust those claiming they know everything when it comes to telling others their business secrets or when discussing potential new partnerships or alliances – especially not on social media sites such as this one which are designed for sharing them among a group. “These two cohorts view different investments differently,” according to Pelzar. Younger investors’ appetite for alternatives has not abated; 93% plan on increasing use over the coming few years according to Bank of America research. One reason behind young investors having different views than older wealthy individuals may come down to what type of investments were available at birth, according to Pelzar. Pelzar noted that younger investors now enjoy access to more asset classes than did their parents during childhood, leading them to place less trust in traditional stocks and bonds due to having been exposed to both financial turmoil and dotcom bust. More recently, increased correlations between equity investments and fixed income may be prompting investors to diversify their assets more. Pelzar explained: “[They’re] trying to spread around risk.” Pelzar found that wealthy investors ages 44 and up primarily invest in domestic equities (41%); real estate investments (32%); emerging market equities (25%); emerging market equities (18%); private equity (15%) and direct company investments (15%) (Source: Bank of America). Meanwhile, younger, wealthy investors also had higher cash allocations according to this research study. Experts warn that having too much cash may mean missing out on higher market returns; today’s elevated rates offer higher than ever rates on cash deposits since over 10 years ago. “Underinvesting can be a risk, which I think more younger investors are susceptible to,” Callie Cox, chief market strategist of Ritholtz Wealth Management recently told CNBC.com. Increasing cash allocation may make sense for younger wealthy investors with large holdings in alternative investments that tend to be less liquid or who are planning major purchases like buying a house – as noted by Pelzar.When planning:What you should consider “Investors now have more choices for how they invest their money than ever,” noted Douglas Boneparth, CFP and president of Bone Fide Wealth in New York City. When diversifying into alternative investments such as hedge funds or real estate funds, Boneparth advises investors to be wary of potential costs such as lockup periods or fees that come with investments like 2 and 20 fee structures that might apply – something Boneparth noted as part of his membership of CNBC FA Council. He adds: