Investors may not be leveraging adequate risk management tactics

Amid rampant economic uncertainty, mounting regulatory pressures and widespread market volatility, U.S. investors are beginning to grow fearful of potential losses, yet few are turning to credit risk management practices. According to a report released this week by Natixis Global Asset Management, nearly half of U.S. investors are worried about losing money due to these conditions. Similarly, less than half of respondents claim they understand their portfolio's risk "moderately" or "very well," and as much as 70 percent say they understand alternative investments "only a little" or "not well at all." "Our goal is to build a stable of alternative investments that help manage risk," said John Hailer, president and chief executive officer of Natixis. "At the end of the day, investors know they need to invest, but they are searching for ways to protect their principal. They need better tools to manage risk and lessen volatility." The study comes amid reports that banks and investment firms are beginning to return to risk-addled markets such as subprime lending - a practice that was chiefly responsible for inflating the much-ailed housing market in the years leading up to the 2008 financial collapse.