To begin with, investing in an “alternative” is any type of investment that is not considered mainstream, such as stocks, bonds, mutual funds or other common investment vehicles. Typical alternative investments are wine collections, real estate, shipping containers, commodities, private equity, hedge funds, carbon credits, film production and venture capital, to name only a few. The fact of the matter is that there are several hundred different investment types that could qualify as “alternatives” and therefore it is often difficult to look at the entire alternative marketplace in a general sense.
A good way to tell if an alternative investment is ‘good’ or not is to look at the overall industry and listen closely to what other investors are saying. For example, a recent article in the Financial Post reported that among people who invested in alternatives, over 63 percent of the polled investors stated they had a great investing experience and a positive perception of their alternative investment holdings. What is even more intriguing is that 45 percent of the investors polled by the publication also stated that the alternatives in their portfolio were seen as the BEST opportunity for 2014. With investor support at an all-time high, the same article goes on to state that the investment into alternative investments (named ‘non-traditional investment assets) currently exceeds $6 trillion globally. This number has grown by more than $600 billion in 2013 alone.
When you have an increasing number of happy investors sharing reviews and a growing marketplace/industry, the odds are very high that the investment opportunity will continue to remain a good investment throughout the years to come. The future looks so bright in fact, that many investors are actually switching their portfolios over to nontraditional investments because most are performing very well, despite political unrest and the stock market’s ongoing volatility.
Based on investor satisfaction, it would seem that confidence in investing in alternatives is at an all-time high and that the industry is maturing to the point where more and more investors are looking for different ways to increase their investment returns and over-all net worth.