What’s Your Alternative?

Alternative investments are commonly defined as investments other than stocks and bonds. These may include commodities, real estate, private equity, real assets, and investments with strategies such as arbitrage and hedging. The benefits of alternative investments include potentially higher returns and diversification resulting from low correlation with other more common asset classes.

Institutional investors, hedge funds, wealthy investors, and large endowments have used alternative investments as a way to boost returns and diversification for years. Historically, these investments have only been available to the wealthy. However, with the growth of mutual funds, the popularity of Exchange Traded Funds (ETFs), and Exchange Traded Notes (ETNs), many alternative investments and strategies are available to all investors.Many individual investors and their financial advisors fail to take advantage of alternative investments. This is due either to the lack of understanding or lack of knowledge that they are available.

Before using alternative investments, it is important for investors to understand the risk, tax consequences, and which alternative investments help properly diversify a portfolio. A good rule of thumb for investors is to not use an investment unless you understand the investment. Savvy Investors are starting to use alternative investments to compliment their portfolio. So ask yourself – what is my alternative?

Kevin McNab

This article is written by Kevin J. McNab. Kevin is President of ACE Wealth Partners, LLC and is a CFP®, ChFC®, and CRPC®. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by ACE Wealth Partners, LLC unless a client service agreement is in place. If you have any questions regarding this Blog Post, please Contact Us. Please read our website DISCLOSURE carefully for additional information.