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Tuesday, 16 April 2019 15:53

Adding Alternative Investments to Your Portfolio Featured

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Adding Alternative Investments to Your Portfolio (US NEW Article)

By Ellen Chang, Contributor April 15, 2019, at 2:08 p.m.

ALTERNATIVE INVESTMENTS are often used by investors to hedge against volatility and add diversification to their portfolio. Investments other than traditional ones, such as stocks and bonds, are known as alternative investments. These types of investments can include commodities, precious metals, real estate, startups, options, hedge funds, private equity, venture capital, and cryptocurrency.

The principal differences between traditional and alternative investments are liquidity and return rates, says Sreeni Meka, a portfolio manager at Interactive Advisors, a Boston online investing company. The most significant benefit for adding alternative investments is diversification since these assets provide hedges against inflation and have a low correlation to the stock market. "We would recommend some exposure to alternative investments such as real estate than other alternatives like precious metals to attain the diversification in the portfolio," he says. "The amount of real estate exposure always depends on how much a client can bear the volatility of their portfolio and the stage of life."

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