“With a good perspective on history, we can have a better understanding of the past and the present, and thus a clear vision of the future” – Carlos Slim Helu
The Impact of Past Events on Your Alternative Investment Strategy
Do you know how the Bretton Woods agreement has impacted your bank balance? Or how the ERISA is going to change your retirement?
Well, you will in a minute.
Signing of the Bretton Woods Agreement
The Bretton Woods Agreement established a new international monetary system post-World War II. With it, came the IMF and the World Bank. The aim was to try and create global financial stability.
Bretton Woods influenced global financial practices because it pegged currencies to the US dollar, which helped to create some stability immediately after the war.
Take the Alternative Investment Timeline Challenge if you want to learn more about the impact of the Bretton Woods Agreement.
Creation of the Small Business Investment Company (SBIC) Program
The SBIC program was established in 1958 to support small business growth through investment.
It aimed to provide funding to small businesses that might otherwise struggle to secure financing – similar to our sister company’s Small Business Finance notes.
The program has influenced current practices in venture capital, private equity and Small Business Finance notes by encouraging investors like you to support small enterprises.
If you want to find out which of these investments is right for you, click here.
Passage of the Employee Retirement Income Security Act (ERISA)
ERISA was enacted in 1974 to protect employee retirement income by setting minimum standards for pension plans.
This legislation resulted in stronger retirement plans. Plus, it allowed for alternative investment strategy choices within these plans.
Today, ERISA regulations have a major influence on investment strategies and compliance for fund managers.
They must follow strict fiduciary and transparency standards to make sure their retirement funds are managed securely.
This ensures that investment options remain safe and well-managed, benefiting both investors and retirees.
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Creation of the First Fund of Hedge Funds
The first fund of hedge funds gave investors like you access to a diversified range of hedge funds within one single investment.
This shaped modern hedge fund strategies because it made portfolio diversification simpler for investors.
Regulatory scrutiny of hedge funds has increased over the years. Funds now require much more transparency and accountability – as seen in the case of the Madoff scandal.
A key takeaway from the first fund of hedge funds is the ongoing significance of compliance, regulation and diversification in hedge fund investments. This is a trend true for alternative investment strategies more broadly, too.
To learn more about the first fund of hedge funds, take our quiz here.
Understanding the Evolution of Alternative Investment Strategies
If you want to learn more about the events described here, take the Alternative Investment Timeline Challenge.
Or you can explore Supervest to see if alternative asset notes could be a good addition to diversify and strengthen your portfolio.
