ALTERNATIVE INVESTMENTS
PART 2
The best way to diversify your portfolio
How to get started in alternative investing
Nichola Loock
Diversification is a buzzword thrown about by many financial planners and fund managers. But how does diversification of your portfolio really benefit you and why are alternate investments the perfect vehicles to achieve this?
Diversification is a management strategy that blends different investments into a single portfolio. The motivation behind this is that a variety of investment will yield a higher return. It also suggests that investors will face lower risk by investing in different vehicles.
“ Never invest in a business you cannot understand.”
Whether this is your first-time creating diversification in your portfolio, or you are wanting to add something different to your strategy, alternatives are a great way to protect and build your wealth.“ Contrary to what some commentators predict, we feel that investors may start gravitating towards the relative safety of fixed assets. The Coronavirus has illustrated that the economy and related market investments are arguably fragile in times of crisis. Real estate offers a tangibility that investors will be drawn to,” says Nick Morgan, Co-founder of Opportunity Private Capital.
Alternative investing is an investment strategy that’ s been used by the 1 % for a long time. This category of investing was typically only open to those meeting minimum net worth requirements and with high investment minimums. However, with changes in regulations and technology enabling easier access to opportunities, many different types of alternative investments are opening up to the everyday investor.
Types of Alternative Investments Alternative investments include venture capital, private equity, hedge funds, real estate investment trusts, commodities as well as real assets such as precious metals, rare coins, wine, and art. Here are the most popular types of alternative investments:
16 FEBRUARY 2021 SA Real Estate Investor Magazine