More retirees have been investing in funds that are not mutual funds. These funds sometimes pay more than traditional mutual funds and can be from non-traded real estate investment trusts or from private placements. These funds can have much higher fees and can be difficult to withdraw from. A lot of these funds are exempt from the SEC and can be used by dishonest brokers to take advantage of retirees. Even with these risks, the sale of these holdings are increasing due to the draw of the additional growth.
Key Takeaways:
- Utilize interval funds, which are closed-ended with a fixed number of shares.
- Your interval fund won’t trade on an exchange, but it will give you the opportunity to repurchase shares at a set interval.
- For sophisticated customers that understand structure and liquidity, interval funds make a lot of sense.
“The private securities market, where offerings are exempt from SEC registration, can also be a magnet for unscrupulous brokers who prey on older investors.”
