Investments are the means of saving money for the future and thus an inseparable part of everyone’s life. Big or small each working individual these days attempts to save up some money for the future. But this saving is not done by keeping some aside. Instead, it is done by following the proverb, ‘to make money you need money. This is what is exactly meant by investments. One puts in some money to get back not just the invested amount but also a share of the profit explains veteran financial advisor Scott Tominaga. He is an expert in financial assistance and very clearly explains how alternative investments help one’s money grow, away from the traditional bonds and market shares.
Alternative investments involve the investment of money but not a lump sum in return, as per the traditional way. What one gets in return could be a source of regular income. In the present times, one could use their money to buy a property or real estate and generate a regular income out of it. This certainly takes off a lot of worries during retirement. Though this is being referred to as an alternative investment means yet this should not in any way be confused with being a novel form of investment.
Investment in commodities and real estate is in fact a very ancient form of investment. Nonetheless, it does not also imply, emphasizes the experienced Chief Operating Officer of Partners Admin LLC, Mr. Scott Tominaga, that this does not include any non-traditional aspect of investment in it.
Investment tools like hedge funds and private equity are also included in this form of investment. Derivation and leverage are the tools to get the maximum benefit from the market by the managersof this investment type. The way this active investment strategy differs from the traditional ones is in the inclusion of lower risks.
The traits of alternative investments include:
They are less liquid
Require a higher fee
Have limited historical risk, and
The regulation is low
Low transparency.
This is why Scott Tominaga and other adept financial advisors like him warn potential investors of the complexity of the legal and taxation aspect of these.
Investment in these alternative means can be made by:
Direct- investment into any company, it could be in real estate
Co-investment in some company that is also investing in a fund
Any kind of fund investment
Since these alternative means go against the tide mostly, they are rather suitable for diversified investments.The protection that these funds provide during the time of inflation is good enough for one to invest in them. It is safe to say that these funds move in the opposite direction of the stock market. This is made possible considering the fact that the investment is made in oil, real estate, or gold.
It is thus no wonder that larger organizations assign a part of their portfolio to hedge funds and use the alternative investment method wisely.