The investment experts will agree that portfolio diversification is an absolute must. But, even though you have invested in stocks, bonds and property, do not think for a moment that all of your bases are covered. It is recommended that you do not stop there, and instead take your strategy a little further. How? Consider investing in nontraditional opportunities that are both tangible and profitable.
It is interesting to note that many of the richest investors are also connoisseur collectors. In the minds of many of the world’s high net worth investors, investing in art, collectibles and other tangible assets is regarded as desirable alternative investment strategy and works well to balance risks in their traditional interests. And, in most instances, the higher the net worth of the individual; the fancier the collection pieces. The fact of the matter is that anything you are able to invest in, that is not a stock, a bond or cash, is commonly referred to as an alternative asset.
Alternatives, like investing in shipping containers, have (for many years) been very popular with institutional investors and wealthy individuals. This is primarily because their returns have proven to have a low correlation with the performance of stock and bond markets and have also proven to beat rising inflation. Albeit an intriguing and appealing notion, in the past investors with a financial net worth of less than $5 million have been shut-out of these secret investment opportunities. Nowadays thankfully things have changed and gaining access is much easier.
Supporters believe that introducing alternative investments to mainstream investors is a financial innovation that is here to stay. According to the experts, when used correctly, alternatives provide individual investors with some of the same benefits that have made them attractive to institutions. In fact individual investors seeking to include these appealing investments to their portfolios have responded with extreme enthusiasm, pouring tens of billions of dollars into the market’s new offerings. According to the fund tracker Lipper, assets under management in alternative investments swelled to $317.9 billion in March 2014.