Investors are now looking for opportunities to achieve their goals by expanding their portfolios while cushioning themselves against the market uncertainties after a shaky traditional market for stocks and bonds in 2020. Having access to alternative investments makes this possible. However, there are some risks involved. Thus, the need to be acquainted with the various approaches available to guide an investor in making well-informed choices concerning the role alternatives play in their portfolios.
Alternative investments are those that are not categorized under traditional investments like cash, bonds, or stocks. They differ from traditional investments by diversifying an investors’ portfolio and reducing the exposure on the stock market. Institutional investors can have hedge funds, wealth management or real estate as their alternative investment while individual investors’ portfolios may include art pieces, vintage cars, or even custom-made attires and accessories. With this diverse range of investments, it is advisable to understand the risk and benefits of the alternatives before including them in a portfolio.
The alts have a low cost of entry since they are not traded publicly, and this causes less transparency and liquidity around the pricing. The upside to this is they are not affected whenever there is a drop in the market values since there is no correlation with the market trends.
The Benefits of Alternatives
Alternative investing has more liquid assets, and it boots higher return potential than traditional investments. This leads to long lock-up periods of the investment, meaning the interests or shares cannot be redeemed daily. They have minimum investment requirements, which involve more investors, unlike traditional investments. They are given access to the risk profile they go through before committing to any investment venture.
Investors are exposed to unique investment opportunities that they would otherwise not have by accessing markets or being part of a start-up fund. The returns might take longer but are significant in the long term.
Low-risk ventures like vintage pieces, wine, or even souvenirs will not generate as much money but will help in generating passive income.
Alternatives are an excellent way to expand your portfolio and reduce the stock market exposure, but they are much more than just creating wealth. An investor can give back to society through programs like rehabilitation centers or allocate money to projects like start-up movies and real estate.
eVest Marketplace for Alternative Investing
Alts like the eVest Marketplace offer a free platform that personalizes investment portfolios. Investors have access to information on diverse opportunities like technology, cannabis, motion pictures, funds, and others, all in one platform.
It gives the investors in-depth knowledge and total control of their investment habits while reducing the risks involved at no hidden charges. They are outperforming traditional investments, and the returns are superior in comparison.
The digital technology on the eVest Marketplace, together with deregulation, reduces the overall Sponsors investment cost by over 90% which is immediately reflected in the Return On Investment (ROI) to the investors.
There are alternative investment opportunities such as start-ups, cannabis, Funds, motion pictures, gaming apps, Hemp, etc. on the Marketplace, which are available for the investing public at zero commission, thus rebalancing the economic and power needs. Lower going-in costs and zero commissions translates to better returns for both Sponsors and investors alike.
Retail investors on eVest Marketplace have a chance to also contribute to the social development of the economy by being involved in the infrastructure development, social calls, and drives. For private equity, there is job creation, and the general standard of living is improved. For obvious reasons, the eVest Marketplace is slowly becoming the fastest growing Marketplace in the industry.