@Leisure - Vol-46 | srei
  • <none>

@Leisure - Vol-46

Why you should consider alternative investments

At some point or another, we have all made investments or heard about traditional investments such as savings accounts, fixed deposits, bonds, shares etc. However, the realm of investments is much wider and there are also many other alternative investments in existence. These kind of investments are often popular with institutional investors as well as high net worth individuals, but have not yet found mainstream acceptance due to either their inherent nature or limited regulatory oversight. So how can you access these investments and what are they?

Alternative Investments: There are many different types of alternative investments in existence such as hedge funds, privately managed funds, real estate, commodities and derivatives contracts. These types of alternative investments can help investors looking to diversify their portfolios from a traditional base of equities and debt. However, they have a high entry threshold at times and the associated products can have complex fee structures, which should be closely examined before putting in any money.

How to access alternative investments: The easiest way to access alternative investments is through the fund route. You could invest in mutual funds and ETFs that invest in alternative investments. Of late, there is also the presence of alternative investment funds (AIFs) in the country, which are gaining in popularity; in 2016-2017 alone, AIFs have grown by 90 per cent. A steady growth in awareness among investors who had till now been in the dark about these investments is leading to a surge in popularity of these investments.

What you should watch out for: While alternative investments may be exciting because of their novelty or because of possible higher returns, they are still not well regulated. Secondly because a higher investment is required to enter some of these products, investors should be extra cautious. The safest way to approach these investments is by taking the advice of a qualified investment advisor. This professional can advise you based on your own risk and reward profile and help you make enter investments which are right for you.

Alternative investments are gaining traction, but they may not be suitable for all investors at the moment. There is a need for more regulatory oversight in this emerging category. However, high net worth individuals should definitely consider exposure in order to gain returns from non-traditional investments as well as to add diversification to their portfolios.

Buddy Jokes
  • The most successful investor was Noah. He floated stock, while everything around him went into liquidation.

  • Q: How to make a million in the stock market?
    A: Start with two!

  • The market is weird. Every time one guy sells, another one buys, and they both think they're smart.

  • Q:Why did God create stock analysts?
    A:In order to make weather forecasters look good.