Why Alternative Investments?

Characteristically speaking, an Alternative Investment is an investment category comprised of non-traditional investments (stocks and bonds).

Alternative Investments can include futures & options (derivatives), currencies, real estate, private purchase programs, as well as hedge fund investments and private equity investments - many using sophisticated, diversified strategies, and usually are considered riskier than traditional investments. As a general rule, many people believe that no more than 10% of one’s liquid net-worth should be allocated to alternative investments. We believe when properly structured, these investments can be quite attractive and although still considered very high risk when compared to a typical “run-of-the-mill” investment, they should not necessarily all be treated equally in terms of risk, as there can be quite a variance from one program to another.

One of the largest advantages of many Alternative Investments is in their ability to profit in virtually ANY economic environment. Time after time, the successful growth of this investment class thrives regardless of conditions such as a strong economy, low inflation, high interest rates, or a depressed stock market. The success of these investments typically depends on performance, as well as the risk and diversification used. Investors adding this asset class to their portfolio can help reduce volatility, minimize risk, and possibly increase the risk versus return ratio of their overall portfolio. Because of this, it is no surprise that alternative investments have increased dramatically in popularity over the past 10 years as investors search for alternatives to traditional markets. It is more common now to see these types of investments used in typical portfolio management strategies.