However, for wealthy families, they do have a list of options, with variety of returns -
- While real estate has outperformed stocks, the long run average hides a lot of variations over time.
- Emerging market returns surged from 2001 to 2010 but have been very disappointing since then.
- Hedge funds gave investors huge returns of over 18% in the 1990s, but as the industry grew rapidly (today there are over 10,000 hedge funds with $3 trillion under management), returns plummeted. Hedge funds only returned 3.4% from 2010 to 2018.
- This leaves Private Equity funds the best alternative - during the last 20 years, private equity returns have outpaced stocks by almost 6%.