Balancing Act: Optimizing The Portfolio With Alternative Investments

Balancing the portfolio is much like determining what diet fits an individual.

There is no “no-one-size-fits-all” diet; diet types will depend on the individual’s objectives (build endurance, bulk up the muscles, lose weight, or others), body fat makeup, age, and lifestyle.

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In optimizing the portfolio, there is an encompassing goal of maximizing returns and minimizing the risks. There are many other factors to consider, however, including the investor’s net worth, annual income, family size, cost of living, aversion to risk, and more. As such, there is no blanket portfolio optimization strategy suitable for every investor.

Other elements that should not be neglected is the current investment climate and potential market storms in the horizon. Over the past century, there had been four instances of high volatility in the market, specifically in the 1910s, ‘30s, ‘80s, and the most recent one a few years back. A balanced portfolio will not ensure protection against losses, but it can smoothen the ride.

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An effective solution for portfolio diversification is investing in alternative asset classes and strategies. These provide a broader menu of investments that can optimize the risk-return dynamics of portfolios in ways that traditional investments cannot. The variety they bring fortifies the portfolio against.

Whitman Asset Management is a global macro tactical asset management firm providing alternative investment programs that target exceptional risk-adjusted returns. Under the leadership of its founder Charles F. Whitman, the company helps clients understand the investment climate, market forecast, and strategies for a well-diversified portfolio. Visit this website for more information.

Valentine Season Investing: No Room For Emotions

By tradition, February has always been the peak time for love and affection. To many, it is the season of hearts. Emotions run high this month. It is indeed an exciting time, but for investors, it’s also a dangerous period to make decisions. They should neither be swayed nor be affected in the least by the hubbub. Ultimately, emotions and the financial markets just don’t mix.

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When it comes to investing, everything boils down to practical, smart decisions. It doesn’t matter how tough a person is; human beings are just vulnerable to emotional highs and lows, which can then lead to judgements which aren’t based on research or rational thinking. In a research by NerdWallet, nearly 50 percent of Americans acknowledge that emotions have led to overspending at some point in their lives. Majority of emotional spenders, moreover, are motivated by stress.

So how can emotional beings take out the emotion when building their portfolios? They need to pair up choices with artificial intelligence, which is often at the disposal of professional investment managers. They can leave some of the informational heavy-lifting to computers and algorithms, but with key input from experience and available data. It seems exciting to some and daunting to most, but the information age has already given way to reliable and secure management of big data.

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The founder of Whitman Asset Management, Charles Whitman uses fundamental and technical data to understand market environments and develop trading ideas that target exceptional returns with managed risk. To know more about investments, visit this website.

Beware: The potentially catastrophic pitfalls of investment

Investment is not without its pitfalls. When a person has long-term goals, it pays to know these pitfalls in order to figure out ways on how to avoid them. Below are some of the more dangerous mistakes people make when investing.

They’re too conservative for their own good.

When people are too conservative, like let’s say they leave their money in a value fund, sure, it won’t lose money, but it also won’t be able to keep up with inflation. If the fund earns 1 percent yearly, and inflation is 2 percent, then the fund owner stands to lose 1 percent annually. Being too conservative also runs the risk of not having enough when retirement comes.

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They invest too much in a single stock.

Several factors can lead to this. Whether it’s the employer’s stock as part of a person’s compensation or retirement account, or a gift that was given a long time ago, having all the eggs in a single basket is never a good idea. A good amount is around a maximum of 10 to 15 percent.

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They’re attempting to catch the market by timing it.

One big problem with the mindset of investors is that they’re trying to “time” the market by looking at the patterns. So many are hesitant to buy in because, in their minds, the market is “due” to go down – which in all probability, may take years to happen. What happens is the investor loses countless chances at raking in returns.

Charles F. Whitman is an investment strategist from Chicago. He uses his investment and technical knowledge to help his clients learn about investment strategies and boost their portfolios. Charles is also the founder of Whitman Asset Management. Learn more about Charles and his firm’s work by checking this LinkedIn account.

Types of Alternative Investments in the World Today

An alternative investment is any kind of investment other than traditional investments in the form of stocks, bonds, and cash. Usually institutional investors or HNWI (high-net worth individuals) hold alternative investments. With this in mind, let’s take a look at the different kinds of alternative investments open to interested individuals:

Hedge funds
Hedge funds are investment funds from high-net worth individuals or institutional investors. These funds are often handled by management firms, and are in turn invested in different assets. Hedge funds are constrained by little to no regulations and are known to invest in liquid assets.

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Private businesses
Investors can directly invest in startups and private companies. They can simply be an investor (silent partner), or they can take an active role in the direction of the company. It is a high-risk, high-return approach, since a huge percentage of startups fail.

Real estate
Many people have called real estate the one sure business in the world, since space is as precious a commodity as time. Investors usually invest in land and either have it developed, leased, or they wait for the value to go up before selling the property.

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Venture capital
Venture capital finances companies that are starting out, but are believed to have a huge potential for growth and expansion, or may have already exhibited such growth or expansion, or both. Venture capital is often the price for a stake at ownership. Nowadays, venture capitalists invest in information technology and social media.

Charles F. Whitman is a Chicago-based investment strategist. His firm, Whitman Asset Management, provides alternative investment programs targeting exceptional risk-adjusted returns. For more about alternative investments, visit this Twitter account.

Hobbies And Personal Interests As Alternative Investments

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With some volatility and uncertainty in the financial markets, balancing and diversifying the portfolio with alternative investments has been the game plan of investors and analysts as these strategies are paying lucrative returns.

Alternative investments have captured the attention of many investors. An example of which is tangible collectibles that stem from hobbies or personal interests. According to one study, one in six investors now includes in their portfolios items such as watches, coins, stamps, classic cars, and fine wine and other spirits.

It costs on average an investor around $18,000 to spend on an item considered to be an alternative investment. It typically nets a return that is marked at 39 percent per item, in the short term.

Based on auction price data, luxury alternative investments over the long run can be the most lucrative undertaking. Classic cars have shown to collect a 469 percent in return more than 10 years after initial investment. Art, wine, and gold, on the other hand, net more than 200 percent.

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However, even some people during the past years are spending less than a thousand dollars on these hobbies and personal interest investments. This illustrates that high cost is not necessarily a hindrance to diversifying portfolios.

The key to the success of this alternative investment segment is research. By partnering with an investment firm whose expertise is in these markets, these investments can be well taken advantage of.

Investment strategist Charles F. Whitman uses both fundamental and technical data to analyze market environments and formulate trading ideas that target exceptional risk-adjusted returns. He founded Chicago-based Whitman Asset Management, a firm that provides alternative investment programs. Read more about Mr. Whitman and his company by visiting this website.

An Introduction To Alternative Investment Strategies

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Most investors are well-aware of traditional investment strategies. However, outside the sphere of conventional investment options, there exists a world of alternative investment strategies. Investors should be aware of these options because an alternative investment strategy can be helpful in some situations. Moreover, investors can benefit from alternative investments; despite offering lower risks, these strategies can provide greater returns.

Unraveling the options of alternative investment requires investors to consult a trusted and skilled financial advisor. For instance, investment strategist Charles F. Whitman founded Whitman Asset Management, a firm that provides its clients various alternative investment programs, including: 

• Private equity- This comprises of investors that directly infuse capital in private companies and other assets. Capital from this kind of investment comes from pension funds and retail and institutional investors. After purchasing a business, a private equity investor seeks to make it more profitable. After which, the investor may sell the assets or have them on the stock market. 
• Direct investment in startups- Also known as angel investing, this strategy is known to be a high risk and high return strategy for investors. Investors can easily invest in startups by providing the needed capital. 
• Hedge funds- These consist of pooled funds that utilize various investment strategies such as equity long-short, distressed assets, and arbitrage. Compared to private equity, investors can acquire their money more frequently in hedge funds.
• Private placement debt- Investors provide finances to a company through private placements. Investors usually use promissory notes or mezzanine debt to provide them with a steady income. 

 Each of these alternatives possesses distinct technicalities and complexities that can be best understood by investors by consulting optimal investment strategists.

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As an investment strategist, Charles F. Whitman uses fundamental and technical data to analyze market environments and formulate trading ideas in a framework focused on risk management. He is also the founder of Whitman Asset Management, a Chicago-based firm that provides its clients with alternative investment programs that target exceptional risk-adjusted returns. For more information on Mr. Whitman and his professional career and accomplishments, visit this LinkedIn page.