Investors Hunt for Alternatives

Ron Roge, a New York investment adviser, steers clients away from hedge funds and their registered counterparts because he doesn't feel they offer enough transparency.

Ted Toal, an Annapolis, Md., adviser, offers this advice: "The big thing investors need to realize is that regardless of what they think the market will do, their thinking is probably going to be wrong," he says. "They should be concerned, and they should own a couple of asset classes that are shown to have a negative correlation to the main U.S. markets, but they should know that's working when the U.S. markets are doing well, and [their alternative allocations] are doing poorly."