DEMYSTIFYING ALTERNATIVE INVESTMENTS

If you're an investor looking to diversify your portfolio and potentially increase returns, you might have heard about alternative investments. But what exactly are they and how can they benefit you?

Alternative investments refer to any investment outside of traditional stocks, bonds, and cash. This can include investments in private equity, real estate, hedge funds, commodities, and even collectibles. Unlike traditional investments, alternative investments are not traded on public markets and may be held by private investment funds or purchased directly by individual investors.

So, why consider alternative investments? For one, they offer the potential for higher returns and lower volatility. This is because alternative investments are often less correlated with the stock market, providing greater diversification and potentially reducing overall portfolio risk. Moreover, some alternative investments may have the potential for greater returns than traditional investments.

A factor to consider is that alternative investments can have longer time horizons and some have higher minimum investment requirements compared to traditional investments. This can limit some access to these investments for individual investors and require more specialized expertise to evaluate and manage.

That being said, alternative investments can provide investors with exposure to a wide range of asset classes and strategies, allowing for further diversification in your portfolio. Private equity, for example, involves investing in private companies or purchasing public companies with the aim of taking them private. This can provide investors with access to fast-growing companies or undervalued assets that are not available on public markets.

Life insurance specialists can also play an important role in helping investors navigate the world of alternative investments. By understanding your financial goals and risk tolerance, they can provide guidance on which alternative investments may be suitable for your portfolio and help you create a diversified investment plan.

In conclusion, alternative investments can be a valuable addition to your investment portfolio. However, they require a greater degree of due diligence, specialized expertise, and may have longer time horizons and higher minimum investment requirements. Consult with a qualified Private Equity Specialist to determine if alternative investments are right for you.

I’d be happy to book a conversation with you anytime, you can reach me a brenault@liahona.ca