Into to Alternatives
Most investments available to today's retail & accredited investors are public securities - primarily stocks & bonds.
Our parents portfolios were reflective of the general investment advice of the time, slowly but surely invest in good stocks & they'll appreciate overtime & provide you an income come retirement. We call that the 60/40 rule - 60% stocks & 40% bonds.
Today, that strategy doesn't work.
High net worth individuals have been allocating more money towards, higher returning and lower volatility alternative investments. Sounds great - but what are they?
- Real estate
- Private Credit (aka Debt)
- Private Equity
- Hedge Funds
- Venture Capital
Why We Love Alternative Investments
Tumultuous public markets have illustrated the need for investors' access to different kinds of investments.
Investing in alternatives provides diversification that's essential to shield investor capital when markets rollercoaster. It's difficult to plan for retirement when forecasting returns becomes a pseudo-science. We know there has to be a better way.
Large asset management firms are finding alternative investments provide yields that can outperform their peers in traditional markets. This means as stocks & bonds are becoming more efficient, there's room to scale with alternatives.
A major benefit of alternatives, especially in real estate & private equity is the investor's close proximity to the assets. If you invest in a real estate fund, that capital's being directly invested in a variety of real estate assets providing both cash flow & appreciation. You can participate in the promote structure & typically collect a preferred return during the life of the fund. Try that in stock market investing.
Hedging Against Inflation & High Rates
Recent inflation's illustrated most investor portfolios aren't property allocated to investments that can hedge or even excel in inflationary periods.
For example, real estate has the benefit of being able to pass through rising costs to tenants through rent increases. As many businesses have to absorb rising costs, real estate rents & values can rise with it.
Rising interest rates might mean you're bank's paying out slightly more interest to your savings account, but still how can investors profit off sky high rates? Credit funds can take advantage of dried up lending & high rates by stepping in as defacto lenders.
For investors looking for a longer term, fixed income investment - a credit fund can be a perfect option.
Applicants can access debt for real estate projects or business from a credit / debt fund as you would a bank. The flexible lending approach provides both the lender & applicant with a superior product.
How You Can Participate
Up until recently it was difficult to invest in alternative investments.
Either you had to buy your own rentals, start / invest in a friend's business, or have a high enough net worth to receive invites from large firms.
Now, accredited investors can easily investing cash flowing real estate, private equity search funds, or credit funds lending out to both. Luckily, there are different products that can be tailored to your investment requirements.
Vintage is an alternative investment expert that provides investors with a variety of private market funds to help prepare them for a high-cash flowing retirement.
