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Alternative Investments

Alternative investments such as real estate, private equity, oil and gas, and absolute-return vehicles have gained significant momentum in recent years. The Yale University Endowment has led the way with a significant allocation to alternatives. According to Yale’s investment office, “The heavy allocation to non-traditional asset classes stems from their return potential and diversifying power. Today's actual and target portfolios have significantly higher expected returns and lower volatility than the 1993 portfolio.” (Yale endowment investment office, 2011) It may not be appropriate for every investor to have a heavy allocation in the aforementioned asset classes, although it may be prudent to consider using alternative investments as a component of one's overall portfolio.

In recent years, independent Broker Dealers have made alternative investments widely available to the retail investing public in the form of investment products, such as Non-traded REITs, Business Development Companies and other non-conventional investment structures. These investments have provided retail investors access to institutional quality investments which historically were the exclusive stomping grounds of institutional investors.

There are several risks associated with Alternative Investments including, but not limited to, lack of liquidity, conflicts of interest, significant issuer fees, non-guaranteed income, highly speculative investment, tax laws subject to change.

If you would like to learn how to include alternative investments in your portfolio, call us at  844-427-1031.