New research by the Center for Applied Research, a think tank affiliate of State Street Corporation, is bound to leave a few advisors scratching their heads.

That’s because retail and institutional investors are making bets contrary to their investment goals, according to the research, entitled: The Influential Investor: How Investor Behavior is Redefining Performance.

Specifically, the study, which was based on 12 months of research and input from more than 3,300 investment management industry participants, found that when retail investors were asked what steps they needed to take over the next ten years to retire, the majority said to invest more aggressively, yet cash is their number one allocation now and is expected to remain number one over the next decade.

Also, low-yield markets have increased institutional investors’ appetite for alternative strategies. Yet, the majority of respondents admit their greatest challenge is not having a deep enough understanding of these assets.

“While investors have never been as aware of their micro and macro environments, they are exhibiting behaviors that are divorced from their stated investment objectives,” stated Kelly McKenna, global head of the State Street Center for Applied Research.



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