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After battling downturns in the stock and bond markets, more advisors are turning to alternative investments, according to a Cerulli Associates survey.
Cerulli sees a “Goldilocks moment” for these assets amid demand for income, higher returns and volatility protection as more products become available.

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After battling downturns in the stock and bond markets, more financial advisors looking to further diversify their clients are turning to alternative investments, according to a recent survey from Cerulli Associates.
Falling outside of traditional asset classes, alternative investments are typically added to portfolios for more diversification, income generation and the possibility of higher returns. 

The report, surveying 100 advisors during the first half of 2022, found average alternative allocations of 14.5%, with advisors aiming to boost percentages to 17.5% in two years. 
More from Personal Finance:The wealthy now have more time to avoid estate taxesHere are 6 strategies to recession-proof your finances at any ageWhat the Fed’s next major interest rate hike means for youWhile average industry allocations for alternatives and commodities may be closer to 10%, Cerulli sees a “Goldilocks moment” for these assets amid demand for income, higher returns and volatility protection as more products become available.
Almost 70% of respondents said the top reason for alternative allocations was to “reduce exposure to public markets” and 66% aimed for “volatility dampening” and “downside risk protection,” according to the report. Other top reasons for alternatives were income generation, diversification and growth.  

Where advisors are investing

Alternative investments may fall into four categories: hedge funds, private equity, “real assets” like real estate or commodities and pre-packaged investments known as “structured products.”
“We have been using alternatives for a while,” said Ashton Lawrence, a certified financial planner with Goldfinch Wealth Management in Greenville, South Carolina, whose firm has used assets focused on events and company mergers, along with funds offering downside protection through put options. 

“When interest rates were extremely low, we wanted to have something that would anchor the portfolio but not be tied to interest rates,” he said.

Scott Bishop, executive director of wealth solutions at Houston-based Avidian Wealth Solutions, said his firm used private equity, private debt, some hedge funds and some “smaller investments” that are less attractive to Wall Street banks.
The most popular alternative assets are so-called liquid alternative mutual funds and exchange-traded funds, offering hedge fund-like strategies to everyday investors, according to the Cerulli survey, along with non-traded real estate investment trusts, that aren’t bought and sold on a stock exchange.

The risks of alternative investing

Gerenme | E+ | Getty Images

With a range of assets falling under the alternative investing umbrella, it’s easy to misunderstand what you own and what is designed to do, Lawrence said.
Before diving into alternative investments, you need a clear understanding of the underlying asset and the environment where it may perform the best. Otherwise, you may have mismatching expectations, he said.
“A hammer is a tool and a spatula is a tool,” he said. “But if I take a hammer and try to flip pancakes in the kitchen, I’m going to have a bad experience.”

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Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Friday’s key moments. 1. Mixed earnings signals on consumer strength 2. Social media stocks get slammed 3. Get ready for the most important week of earnings season 1. Mixed earnings signals on consumer strength The major indices were down Friday, but stocks are still looking to close the trading week with gains. It was a busy five days for earnings, which helped us get more insight into consumer strength. AT & T (T) reported on Thursday and while the telecom giant provided strong wireless subscriber growth, it lowered its free cash flow guidance from $16 billion to $14 billion, flagging consumer credit as a potential early-stage concern. AT & T still outperformed Verizon (VZ), which reported on Friday. VZ had a disappointing quarter with flat revenues and lower-than-expected subscriber numbers. The wireless network operator cut its full-year EPS outlook from $5.40 to $5.55 down to $5.10 to $5.25. Most notable for Verizon was a year-over-year increase in churn, which is the rate at which consumers discontinue service with the company. American Express (APX) on the other hand beat expectations for the second quarter with record spending from card members, stemming from strong appetite for traveling and entertainment. Based on the company’s performance year to date, Amex raised its full year revenue growth guidance to 23% to 25%, from 18% to 20%. The Federal Reserve’s Federal Open Market Committee meeting is on deck next week from July 26 and 27. Investors will be gauging the central bank’s decision on how far it will move interest rates. Analysts expect the Fed will hike rates 75 basis points. 2. Social media stocks crushed The big story Friday morning came from Snap (SNAP)’s second quarter earnings, which missed on the top and bottom lines. Despite the company’s May warning that its second-quarter results would come in below expectations, the company’s evaporating growth can be seen in the numbers. Snap’s sales growth was 42% in the fourth quarter of 2021, slowing to 38% in the first quarter and then plunging to 13% year-over-year in the second quarter. SNAP didn’t provide guidance for the third quarter and said it plans to slow hiring. SNAP is down more than 35% Friday after revenue growth slowed due to challenges related to a difficult macro environment and growing competition. Twitter (TWTR) added to bad news for the sector with its revenues falling 1% compared to last year, while the Street expected a 10.5% growth. Just like Snap, Twitter cited advertising as its main challenge — along with the battle over Elon Musk’s pending Twitter acquisition. Meta (META) and Alphabet (GOOGL) fell on these earnings, roughly 7% and 5% respectively. But Snap, Meta and Alphabet are very different companies, said Jeff Marks, the Investing Club’s director of portfolio analysis in Friday’s Investing Club ‘Morning Meeting.’ Snap is not profitable while Meta and Alphabet are highly profitable companies that trade at a reasonable valuations with larger platforms that offer higher return on investments to advertisers. If an advertiser needs to slash its advertising budget, we believe they are less likely to cut from Alphabet and Meta. Plus, they are great long-term companies to hold. Both Big Tech companies, and Club holdings, will be reporting earnings next week. 3. Get ready for the most important week of earnings season Microsoft (MSFT) reports Tuesday after the bell. Foreign exchange rate headwinds and lockdowns in China could hit earnings but its cloud computing business, Azure, is doing very well. Alphabet will report reporting Tuesday after the bell, and Meta reports Wednesday after the bell. Humana (HUM) reports Wednesday before the bell. The stock is up 5% year to date. While there were challenges with Medicare Advantage growth earlier this year, we like Humana because it’s a defensive name that will perform in a recession. Qualcomm (QCOM) will report after the bell on Wednesday. While the stock has had a nice run over the past couple weeks, QCOM is down 15% this year. But shares are still cheap and pay a dividend. On earnings, we will be looking to confirm whether Apple (AAPL) is using Qualcomm’s 5G modems in their iPhones — which would be a win for the company. Ford (F) earnings will come in after the bell on Wednesday. The chip shortage is limiting the company’s production, but volumes are offset with higher prices. The stock has a reasonable valuation and comes with a 3% dividend yield. We believe Ford has a bright future in the electric vehicle business, especially following news this week about batteries . (Jim Cramer’s Charitable Trust is long META, GOOGL, MSFT, QCOM, HUM, F, AMZN, AAPL. See here for a full list of the stocks.) “As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade” THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.”

A stuffed ghost rests on a trader’s screen above the floor of the New York Stock Exchange after Snap listed its IPO in New York, March 2, 2017.
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SAN FRANCISCO, CA – APRIL 28: Deanna Sison takes a break from preparing preordered lunches to check the status of her federal small business loan application at Little Skillet restaurant in San Francisco, Calif. on Tuesday, April 28, 2020. Most Covid financial relief to small business has now ended, but the need for more funding remains.
San Francisco Chronicle/hearst Newspapers Via Getty Images | Hearst Newspapers | Getty Images

For many small businesses, access to funding can be a matter of life and death. 
The stakes are especially high given that 18.4% of U.S. businesses fail within the first year, 49.7% after five years and 65.5% after 10 years, according to a LendingTree analysis of data from the U.S. Bureau of Labor Statistics. One of the top reasons businesses go under is lack of funding, so it’s especially important to know where to turn if you need a lifeline. 

While the options can depend on factors such as size, industry, amount needed, time frame and purpose, here are eight possibilities to consider:
1. Family and friends
This can be a great place to turn because it doesn’t generally come with a lot of financial background requirements or other pre-requisites. “Uncle Charlie is going to be more willing to believe in you without requiring extensive financial documentation,” said Joshua Oberndorf, a manager in the private business services group at EisnerAmper.
Pros: Easier access to needed funds without high interest rates.
Cons: Failure to pay back the funds in a timely manner, or reneging completely, could sour family relationships. “Money is as much accounting as it is psychological,” Oberndorf said.
What else to know: According to the IRS, family members are supposed to charge a minimum interest rate to avoid adverse gift tax consequences. The IRS publishes these Applicable Federal Rates (AFRs) on a monthly basis.

2. Banks
Pros: Trusted and well-established source of funding. May be lower cost than other options and offers the ability to grow the lending and banking relationship over time.
Cons: Banks can have rigid lending requirements, including a good personal credit score and ample cash flow and income, that may be out-of-reach for some credit borrowers, and the process can be slow, sometimes several weeks to secure a loan.
What else to know: Rates can range from around 3% to about 7%, according to LendingTree. Consider a smaller bank, which may be more willing to grant credit and walk you through some of your options, said Matt Barbieri, a certified public accountant with Wiss & Co., who provides business advisory services.
3. Online lenders or funders
Pros: Offers quick access to capital, generally through a simple, online process.
Cons: It can be hard to discern actual cost of capital, especially with a merchant cash advance, which is an upfront sum that a business is on the hook to repay using a percentage of debit and credit card sales, plus a fee. Some online lenders and funders may not have long-standing track records, and the option may be more expensive than others. An online loan, for instance, has an APR of between 7% and 99%, whereas the approximate APR of a merchant cash advance runs between 40% and 350%, according to NerdWallet.
What else to know: Do your due diligence on any online lender or funder you plan to use, said Craig Palubiak, president of Optim Consulting Group. Make sure the company has a good reputation and multiple good reviews, and be sure to compare multiple options. It’s also important to drill down to the total cost of capital, taking into account the interest rate, if applicable, fees, and early payment penalties, if any.
For help understanding the true cost of a merchant cash advance, use an online calculator.  
4. SBA loans
Pros: Federal-backing provides access to low-rate bank financing for small and large loans. There are different types of loans and lenders and programs have unique eligibility requirements. Resource centers are available to help business owners, including those in underserved communities.
Cons: The approval process can be slow. The timeline depends on the loan, but generally it can take a few months. A down payment or collateral may be required. Low-credit applicants may not be approved.
What else to know: There are different types of SBA loans, and maximums vary. The most common SBA loan type is called 7(a), and you might expect to pay somewhere in the range of 7% to 9.5%. “Be prepared to work on a refinance as soon as the agreement allows,” Barbieri said. This will allow you to remove personal guarantees and restrictive covenants that can stifle growth, he said. An SBA loan may offer a longer repayment term — under the 7(a) program, up to 10 years for equipment and working capital; 25 years for real estate — and may offer competitive interest rates compared with conventional bank loans.
5. Credit cards
Pros: Quick access to capital with the possibility of rewards. It could be a good option for short-term funding needs, if you are certain you can pay off the debt before interest starts to accrue. Business cards tend to carry higher credit limits than personal cards.
Cons: Interest rates can be high. Cards that are well-ranked by Creditcards.com offer APRs in the range of close to 10% to nearly 35%, and some cards charge an annual fee. Generally not a good option for large funding needs.
What else to know: “Don’t rely on this as a sole source for funding growth; if you are too high risk for the other categories, seriously consider that before taking on consumer credit as a business,” Barbieri said.
6. Investor equity
Private grants, private equity and individuals with money to invest can serve as sources of funding. 
Pros: Positive cash flow, as well as expertise to help propel the business forward. 
Cons: Dilution of capital, difficult to find the right match. 
What else to know: Palubiak recommends owners tap their network and affiliate with start-up communities and local organizations to make investor connections.
“Spend as long as you can dating before picking your mate,” Barbieri said. “Make sure their goals are aligned with your goals or it will end badly.”
7. Federal, state and economic development grants
Pros: Typically non-dilutive, can be small or large.
Cons: There can be administrative hassles and restrictive eligibility requirements. 
What else to know: This could be a good option if you are a company that can be deemed “important” to the infrastructure of your region, Barbieri said. Start your research by researching resources on the website of the U.S. Economic Development Administration to find EDA regional office contacts, state government contacts and other information. 
8. Crowdfunding
Pros: Allows you access to capital without piling on debt, and the ability to raise money and increase awareness of your brand among potential investors and customers while test-marketing an idea.
Cons: May have a low success rate. Could be fees associated with certain platforms. Also, launching a successful campaign takes marketing resources and time.
What else to know: There are a growing number of available equity crowdfunding websites. Before choosing a provider, make sure you understand how the platform works, the fees, who can invest and how it could accomplish your specific funding needs.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns. More

VW CEO Herbert Diess will leave the company at the end of August.
He will be succeeded by Oliver Blume, currently CEO of VW subsidiary Porsche.
Diess is credited with leading the company past its Dieselgate scandal into a new era, driving massive investments in electric vehicles.

Herbert Diess, CEO of Volkswagen
Sean Gallup | Getty

Volkswagen CEO Herbert Diess will leave the company at the end of August, the company said Friday. Oliver Blume, currently the CEO of Volkswagen subsidiary Porsche, will succeed Diess as of Sept. 1.
The automaker didn’t provide a reason for Diess’ departure.

Diess joined Volkswagen from BMW in 2015, stepping into the top job in the wake of the Dieselgate scandal. He is credited with leading the company past the scandal into a new era, driving massive investments in electric vehicles with a goal of selling millions of EVs per year by mid-decade.
In a statement, Volkswagen chair Hans Dieter Potsch thanked Diess for playing a key role in advancing the transformation of the company.
“Not only did he steer the company through extremely turbulent waters, but he also implemented a fundamentally new strategy,” Potsch said.
His successor will be charged with keeping that transformation on course. A career Volkswagen executive, Blume held manufacturing roles at Audi, the Spanish auto brand SEAT and at the VW brand before becoming Porsche’s production chief in 2013. He became the sports car brand’s CEO in 2015.
Blume will have help as he transitions into the new role. Volkswagen said that its chief financial officer, Arno Antlitz, will take on the additional title of chief operating officer to “assist Blume with day-to-day operations.”

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GM on Friday unveiled the Cadillac Celestiq, previewing an upcoming car that will cost $300,000 or more when it goes into production by late 2023.
The car marks a pivot for Cadillac into hand-built vehicles, which are typically reserved for high-end sports cars and uber-luxury models.
GM did not release any technical details about the Celestiq such as its electric range, performance or other metrics.

The Cadillac Celestiq show car previews an upcoming electric sedan for General Motors.

DETROIT – General Motors on Friday previewed what its most expensive Cadillac ever will look like as the automaker attempts to redefine the quintessential American luxury brand into an electric vehicle leader.
The Detroit automaker unveiled a “show car” version of the Cadillac Celestiq, an upcoming hand-built sedan that will cost about $300,000 or more when it’s expected to go into production by late 2023. Cadillac is calling the vehicle its new “all-electric flagship sedan.”

The car marks a pivot for Cadillac into hand-built vehicles, which are typically reserved for high-end sports cars and uber-luxury vehicles such as Rolls-Royce exclusive models. Cadillac aims to exclusively offer EVs by the end of this decade.

The Cadillac Celestiq show car previews an upcoming electric sedan for General Motors.

GM did not release any technical details about the Celestiq such as its electric range, performance or other metrics.
The vehicle will feature five LED interactive displays, including a 55-inch-diagonal screen spanning the front cabin of the car; a “smart glass roof” that includes customizable transparency options; and Ultra Cruise, GM’s next-generation advanced driver-assist system that the company has said will be capable of driving itself in most circumstances.

The Cadillac Celestiq show car previews an upcoming electric sedan for General Motors.

GM confirmed such technologies will be part of the production car, however declined to provide additional details. The Wall Street Journal first reported the expected price and production of the Celestiq, which CNBC also confirmed through a person familiar with the plans who spoke anonymously because they haven’t been made public.
A show car is meant to preview an upcoming production car. As opposed to a “concept car” that automakers typically use to preview certain elements or design direction of a car or brand that may or may not be produced. Cadillac leveraged a similar launch strategy with the electric Lyriq SUV, which recently went into production.

GM said designers drew inspiration from well-known cars such as the bespoke V-16 powered “coaches” of the era before World War II and the hand-built 1957 Eldorado Brougham.

The Cadillac Celestiq show car previews an upcoming electric sedan for General Motors.

“Those vehicles represented the pinnacle of luxury in their respective eras, and helped make Cadillac the standard of the world,” Tony Roma, chief engineer of the Celestiq, said in a release. “The Celestiq show car — also a sedan, because the configuration offers the very best luxury experience — builds on that pedigree and captures the spirt of arrival they expressed.”
GM is investing $81 million at its tech center in suburban Detroit to hand build the upcoming Cadillac Celestiq. It marks the first time GM will produce a vehicle for commercial sales at its massive tech campus in Warren, Michigan. 

The Cadillac Celestiq show car previews an upcoming electric sedan for General Motors.

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Verizon shares fell nearly 5% in premarket trading Friday morning after the company released its second-quarter earnings report.
The phone company cut its full-year forecast.

A Verizon store in San Francisco, California, U.S., on Tuesday, July 20, 2021.
Bloomberg | Getty Images

Shares of Verizon fell nearly 5% in premarket trading Friday after the company reported second-quarter earnings that missed expectations and trimmed its financial forecast for the year.
“Although recent performance did not meet our expectations, we remain confident in our long-term strategy,” Verizon CFO Matt Ellis said in a release.

Shares of Verizon were down 5% at $45.40.
Verizon’s quarterly results came after AT&T on Thursday said its cash flow in the second quarter was hurt by factors including customers waiting longer to make their phone payments.
In its updated guidance, Verizon said it now expects wireless service revenue to increase 8.5% to 9.5%, down from its earlier expectations for growth of 9% to 10% for the full year. Service and other revenue is now expected to be down 1% to flat. It previously said it expected that revenue to be flat.
Verizon also said full-year adjusted earnings are now expected to be $5.10 to $5.25 per share, down from the company’s previous forecast of $5.40 to $5.55. The company said it expects adjusted EBITDA to be down 1.5% to flat, down from its previous forecast for growth of 2% to 3%.
For its second quarter, Verizon said its cash flow was hurt by increased inventory in the current economic environment. It said its operating income in its consumer segment was hurt by higher promotional activity.

For the three months ended Jun 30, Verizon reported revenue of $33.79 billion, which was relatively flat from the year-ago period. Analysts were anticipating revenue of $33.75 billion, according to Refinitiv.
Adjusted earnings were $1.31 per share. That was a penny shy of the $1.32 analysts expected, according to Refinitiv.
Read the full earnings report here.

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German energy firm RWE is to invest in a pilot project centered around the deployment of floating solar technology in the North Sea.
RWE describes “integration of offshore floating solar into an offshore wind farm” as “a more efficient use of ocean space for energy generation.”
Earlier this month, energy firm EDP inaugurated a 5 MW floating solar park in Portugal.

This illustration shows how SolarDuck’s technology could be deployed at sea.

German energy firm RWE is to invest in a pilot project centered around the deployment of floating solar technology in the North Sea, as part of a wider collaboration focused on the development of “floating solar parks.”
Set to be installed in waters off Ostend, Belgium, the pilot, called Merganser, will have a capacity of 0.5 megawatt peak, or MWp. In a statement earlier this week, RWE said Merganser would be Dutch-Norwegian firm SolarDuck’s first offshore pilot.

RWE said Merganser would provide both itself and SolarDuck with “important first-hand experience in one of the most challenging offshore environments in the world.”
Learnings gleaned from the project would allow for a quicker commercialization of the technology from 2023, it added.
RWE described SolarDuck’s system as being based around a design enabling the solar panels to “float” meters above water and ride waves “like a carpet.” 

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A longer term goal of the collaboration is for SolarDuck’s technology to be used in a bigger demonstration project at the yet to be developed Hollandse Kust West offshore wind farm, which RWE is currently tendering for.
In its statement, RWE said the “integration of offshore floating solar into an offshore wind farm” was “a more efficient use of ocean space for energy generation.”

The idea of combining wind and solar is not unique to RWE. The Hollandse Kust (noord) wind farm, which will also be located in the North Sea, is also planning to deploy a floating solar technology demonstration.
CrossWind, the consortium working on Hollandse Kust (noord), is a joint venture between Eneco and Shell.
Earlier this month, Portuguese energy firm EDP inaugurated a 5 MW floating solar park in Alqueva. It described the park, which consists of nearly 12,000 photovoltaic panels, as “the largest in Europe in a reservoir.”
The project would enable solar power and hydroelectric energy from the dam at Alqueva to be combined, EDP said. There are also plans to install a battery storage system.
All the above projects feed into the idea of “hybridization,” whereby different renewable energy technologies and systems are combined on one site.
In comments published last week, EDP CEO Miguel Stilwell d’Andrade said that “the bet on hybridization, by combining electricity produced from water, sun, wind and storage” represented a “logical path of growth.”
EDP would continue to invest in hybridization because it optimized resources and enabled the company to produce energy that was cheaper, he added. More

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The attempt to develop battery materials from a range of sources comes as major European economies lay out plans to move away from road-based vehicles that use diesel and gasoline.
Stora Enso says says it’s “one of the largest private forest owners in the world.”
The partnership will see Northvolt focus on cell design, the development of production processes and technology scale-up.

This image from 2007 shows logs and wood chips outside a Stora Enso paper mill in Finland. The firm says it’s “one of the largest private forest owners in the world.”
Suzanne Plunkett | Bloomberg | Getty Images

Northvolt will partner with Stora Enso to develop batteries that incorporate components produced using wood sourced from forests in the Nordic region.
A joint development agreement between the firms will see them work together on the production of a battery containing an anode made from something called lignin-based hard carbon. An anode is a crucial part of a battery, alongside the cathode and electrolyte.

In a statement Friday, electric vehicle battery maker Northvolt and Stora Enso — which specializes in packaging and paper products, among other things — described lignin as a “plant-derived polymer found in the cell walls of dry-land plants.” According to the companies, trees are made up of 20% to 30% lignin, which functions as a binder.
“The aim is to develop the world’s first industrialized battery featuring [an] anode sourced entirely from European raw materials,” the companies said.
Breaking the plans down, Stora Enso will supply Lignode, which is its lignin-based anode material. Northvolt will focus on cell design, the development of production processes and technology scale-up.
The companies said the Lignode would come from “sustainably managed forests.” Stora Enso says it’s “one of the largest private forest owners in the world.”
Johanna Hagelberg, Stora Enso’s executive vice president for biomaterials, said its lignin-based hard carbon would “secure the strategic European supply of anode raw material” and serve “the sustainable battery needs for applications from mobility to stationary energy storage.”

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The attempt to develop battery materials from a range of sources comes at a time when major European economies are laying out plans to move away from road-based vehicles that use diesel and gasoline.
The U.K. wants to stop the sale of new diesel and gasoline cars and vans by 2030. It will require, from 2035, all new cars and vans to have zero-tailpipe emissions. The European Union — which the U.K. left on Jan. 31, 2020 — is pursuing similar targets.
As the number of electric vehicles on our roads increases, battery supply will become an increasingly important — and competitive — cog in the automotive sector.
Earlier this year, the CEO of Volvo Cars told CNBC he thought battery supply was “going to be one of the things that comes into scarce supply in the years to come.”
Sweden-headquartered Northvolt recently said its first gigafactory, Northvolt Ett, had started commercial deliveries to European customers. The firm says it has contracts amounting to over $55 billion from businesses such as Volvo Cars, BMW, and Volkswagen.
Gigafactories are facilities that produce batteries for electric vehicles on a large scale. Tesla CEO Elon Musk has been widely credited as coining the term.
Northvolt recently announced a $1.1 billion funding boost, with a range of investors — including Volkswagen and Goldman Sachs Asset Management — taking part in the capital raise.
According to the International Energy Agency, electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75% increase compared to the first three months of 2021. More