What is Alternative Investing?

Could you be diversifying by putting all your eggs in one basket?

Key Definitions: 

• Horizontal Diversification:  Adding investments unrelated to what you currently invest 
• Concentric Diversification: Investing in different equities, using the same method of investing 
• Alternative investment:  an investment in any asset class excluding stocks, bonds, and cash. The term is a relatively loose one and includes tangible assets such as precious metals,  art,  wine, antiques, coins, or stamps  and some financial assets such as real estate,  commodities,  private equity,  distressed securities, hedge funds, exchange funds, carbon credits, venture capital, film production,  financial derivatives, and cryptocurrencies. Investments in real estate, forestry and shipping are also often termed "alternative" despite the ancient use of such real assets to enhance and preserve wealth In the last century, fancy color diamonds have emerged as an alternative investment class as well. Alternative investments are to be contrasted with traditional investments. - wikipedia

Like many things, the word Diversification has been hijacked and manipulated by Wall Street over a number of years.  The first known use of diversification in a business sense was  in 1603. The recent events surrounding Gamestop, AMC and Robinhood has cast a light upon Wallstreet which sent the rats scurrying for cover.  Bomb dropped…shock waves.If you think you are diversifying, and all your money is tied up in Wall Street/Nasdaq investments, then you are not really diversified. Your future is tied to algorithms that you have no control. You are in a game that others control over.

Alternative investment options

Investors who want to take their portfolio diversification to another level should consider adding real estate to the mix. Real estate has historically increased a portfolio's total return while reducing its overall volatility.Investors who want to take their portfolio diversification to another level should consider adding real estate to the mix. Real estate has historically increased a portfolio’s total return while reducing its overall volatility.Studies have found that an optimal portfolio will include a 5% - 15% allocation to Real Estate. For example, a portfolio with 55% stocks, 35% bonds, and 10% Real Estate has historically outperformed a 60% Stock/ 40% bond portfolio with only slightly more volatility while matching the returns of an 80% stock/ 40% bond portfolio, with less volatility.Please reach out if you would like to learn more.Contact Us