Often, high net worth investors look for investment strategies that can enhance the risk-reward characteristics of their portfolio. Alternative investments offer these enhancing characteristics along with investment strategies and assets that take a unique and different approach than the traditionally known instruments. With these investments comes a high minimum investment; thus, they are typically chosen by investors with previous investing experience. Some common types of alternative investments are private equity, hedge funds, and commodity pools.
- Private Equity: Typically involves buying shares of private companies and focuses on participating in their growth. This is an illiquid asset class that seeks long term appreciation away from public markets.
- Hedge Funds: Offer broad flexibility in their strategy type based on stated investment objectives. These are typically liquid assets; however, substantial amounts of investment capital are often needed to qualify for investing.
- Commodity Pools: Attract investors who are looking for pool managers to engage in commodity-related trades. Commodity investments involving the purchase of physical assets and these often acts as a hedge against inflation, since there are not sensitive to public equity markets.
Alternative Investments:
From Harvard Online Business School:
7 Types of Alternative Investments Everyone Should Know
From NASDAQ:
Latest News in Alternative Investments
The holiday season is upon us; from story time with sorely missed grandchildren to laughter with friends and family over long-cherished memories, there's little doubt that "the most wonderful time of the year" has arrived. For my family, this season is a time of reflection and connection as we bid farewell to the old year and look, with hope, toward the new. As your family gathers, it may be a perfect opportunity to share your estate strategy and explain your decisions regarding your wealth. I'm always happy to help you structure that discussion and can help explain why we selected specific approaches with your overall financial management. Discussing financial matters can be challenging, so please let me know if I can ever be of assistance, and don't hesitate to share my contact information or let me know how I can help. Happy holidays to you and your loved ones. |