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.