Really Good Reasons Investors Should Invest Like Harvard

Since the 1980s, Harvard has adopted a strategy of diversifying investments beyond mainstream U.S. stocks and bonds. Using a strategy pioneered by David Swensen of Yale, the diversification includes investing in non-traditional asset classes like timber, real estate, private equity, shipping container investments and global stocks and bonds.
Harvard recently announced that its endowment rose 15.4 percent for the fiscal year ending on June 30th 2014, trailing well behind the S&P 500’s return of 24.6 percent over the same time frame. Harvard’s strategy had been performing well until 2008, when the value tumbled 27.3 percent. As a result, their 10-year track record is a less than impressive 8.9 percent, compared to the S&P 500’s 8.38 percent over the same time frame. With Harvard’s diversification, however, only 11 percent of its allocation is to U.S. equities. That allocation outperformed the S&P 500 by 1.1 percent in 2014 and speaks to the importance of investing in emerging markets and that Asian markets are a wise investment too.
It is over the long time horizon that Harvard’s diversification reveals its appeal. Over the last 40 years, Harvard’s 12.3 percent average annual returns beat the S&P 500’s 10.29 percent. For investors with patience and a long-term horizon, Harvard-like diversification can be achieved through exchange-traded funds (ETFs).
Investing in timber stocks through ETFs like iShares Global Timber and Forestry (WOOD), and publicly traded private equity firms through the PowerShares Global Listed Private Equity Portfolio (PSP) allow for Harvard-like diversification. Adding the Global X Guru Index ETF (GURU) and the AlphaClone Alternative Alpha ETF, allow for further diversification through investment in the stock holdings, favored by the largest hedge funds. That said, investors saving for retirement or have long-term goals, can use a number of the well-established nontraditional investments, to invest like Harvard does; and enjoy favorable returns and much-needed diversification.

How-To Reduce Risks When Investing in Alternative Investments

Every investor is looking for valuable insight on how to reduce and minimize risks, especially when considering investments that may not be so mainstream. Here are some investing tips to help you reduce risks when investing in alternative investments:

If The Investment is Out of Country, Find a Broker.
Emerging Markets are a great place to find alternative investments. Given that, each market has its own set of rules and guidelines to follow. I have found the best practice is to hire a broker who is located in the geographic area of interest, and who understands the marketplace well. This can greatly increase an investor's confidence.

Stay on Top Of Your Investments.
With regards to alternative investments, often times you are the one managing your own portfolio. If this is the case, it is critical that you conduct in-depth research to remain on top of every investment. This is made easier in some industries if you hire an asset manager or some sort of financial planner, but ultimately you must understand that the final decisions are yours. If you don't stay on top of these things, your investments might not turn out the way you had forecast.

Invest in Different Industries.
Do not just leave all of your investment money tied up in 1 or 2 industries. Think about nontraditional investments and create a strategy and portfolio that includes a mix of different industries (green technology for example), while keeping some steady and lower risk investments (like real estate or shipping containers).

Always Seek Out Advice And Testimonials.
One of the best things you can do for alternative investments is to research and ask questions. If you are considering an investment type that you are not familiar with, pick up the phone and call the broker. If they cannot provide you with testimonials from current investors, then use the internet and seek out answers for yourself.

Although you can count on these tips to help you reduce risks when investing in alternatives, it is important that you determine what your threshold for risk is, before beginning your investment search. Once you correctly identify for tolerance, you will know exactly what you are working to reduce.

Understanding Investments in a Portfolio is Vital to Success

It is important for investors to stay up to date with their investments and make updates to their portfolio as markets change and new information emerges.

Most investors have a clear, set strategy for investing when they first get started. The really good ones stay on top of it and update their investment path and portfolio as markets change and new technology/industries emerge. Being an investor requires constant attention to your marketplace, AND marketplaces that could affect your chosen industry or sector for investment.

Setting a clear and focused strategy is fairly easy to do with mutual funds, stocks and bonds etc., but when considering alternative investment options for your portfolio, it is important to try and create a strategy for investing that matches the type you have chosen. For example, if you have chosen to invest in a wine collection, it would be imperative that part of your strategy be to become knowledgeable and completely understand the wine industry in general. It would also be very wise to track conditions of grape growing and the overall marketplace for collectors. Also, subscribing to the right magazines and generally staying on top of the industry in general is recommended. In doing so, you will gain knowledge form all these sources that will help you set the record straight, when making important investment decisions.

Essentially, investing in nontraditional investments requires that you become an expert in the industry, or requires that you to hire a broker who can do that for you. In the shipping container leasing/renting industry you can hire a maritime asset management company who handle all of the fulfillment and management of your container. While in the real estate industry you can work with agents or chose to hire a property manager to handle all of the day-to-day items involved in owning property.

In general though, keeping a close eye on your entire chosen industry is critical and someone you can do from home. The truth be told, the Internet can provide more data than you are capable of digesting. It is therefore important to chose an sector or a type of investment that you 1) are comfortable with, 2) can stay on top the industry's changes, or 3) can pay someone to stay on top of it for you. Remember, all this must be accomplished without comprising your overall return. Is the hassle of dealing with tenants enough for the 5% property management fee? Is dealing with a broker for shipping container investments worth the hassle of trying to find people to lease them? In the vast majority of instances, the answer is yes.

Update Your Investing Strategy With Proven Alternatives

Although many investors have an investing strategy in place, it likely does not allow for updates or the introduction of new, more profitable alternatives.

Most experienced investors have a clear, predetermined strategy for investing. Either they have developed it themselves or they have worked closely with a financial planner/broker to define their: risk tolerance, available funds for investment and other important criteria; such as return expectation and investment portfolio breakdown. Although this information is fundamental to the long term performance of their holdings, it likely does not allow for strategy updates that account for unforeseen changes in the market, or for the introduction of new and more profitable alternatives.

In a majority of instances, established investment advisers focus on the well-known traditional investments like stocks, bonds, mutual funds etc., and tend to not focus so much on investing in alternatives; as part of a client's long term strategy. I believe that this happens for many reasons. But, most often it is because of a lack of knowledge of the part of the broker/adviser, with regards to how the leading alternative investment vehicles/markets operate.

Given that many investment advisers are not experienced in investing in nontraditional investments, it is wise for investors to conduct their own research and develop their own, clear alternative investment strategy to satisfy their long-term financial plan. This is particularly important when you stop to consider that these types of investments tend to have different rules and regulations, depending on the investment type and market chosen. Even though emerging markets such as China and India have plenty of new and exciting opportunities, some of the requirements for investment are different in Asia than they are in Europe and other parts of the world.

Without the guidance of an experienced investment adviser/broker, private investors must conduct their own in-depth investment research to make themselves aware of the regulations that govern their investments. By taking the proper amount of time to set the record straight - with regards to any questions or concerns, investment-seekers can make an educated and confident decision about which investing opportunities are right for them. In doing so, they can make revisions to their existing investment holdings and introduce alternatives that will improve immediate and long term portfolio performance.

Finding Alternative Investing Options Requires In-Depth Study

Depending on the alternative investment type you select, there will likely be different rules and regulations for investing. Be certain to do your homework.

It is becoming more apparent to investors that alternative investments are proving to be a very lucrative, and safer investment vehicle for people who are willing to do a little bit of legwork and research their options, prior to investing. That said, obviously before you can be expected to choose the right type of alternative, you must know your options. Given that this is often a challenge for investors, here is how some experts suggest that you identify which investment options are right for you and your portfolio goals:

Each market in the world has unique investment options, which are very often accompanied by different types of alternative investments. If you are looking for investing advice, the best approach is to list your options and built an investment matrix. Write out the things you are looking for in an investment offering, for example: long term growth, short term growth, high return, steady return etc., and make your way through each option so you can see which ones match up with your overall investment goals. This will provide investors with a starting point to begin their in-depth investment research and analysis.

Investors should create their list of options by doing detailed research. Many begin their search by going online to identify trusted resources that are giving helpful advice and sharing their investing experience, without asking for anything in return. Once you have identified some viable options, pick up the telephone and call and see how comfortable you are with the person on the other end of the line. Of course another option is to find a well-established broker who can manage your investment on your behalf.

Depending on the alternative investment type you select, for example real estate, shipping container investments, wine etc., you are going to have very different rules and regulations for investing. Ensure you have done in-depth study prior to putting money into any investment. If you are planning on investing in an emerging countries or in a market you are not overly familiar with, an experienced broker will be able to handle all of this for you and explain everything to you in a clear and concise manner.

Prospering Global Trade Offers an Attractive Investing Option

Investing in cargo containers is not the only opportunity to invest in global trade. In fact, there are many ways to invest in the world's economic growth.

Investors today have several options when considering where to invest; Stock markets, day-trading, mutual funds, real estate and a host of other appealing investment options exist that can temp an investor to try something new. Often times investors will look outside of their mainstream portfolio for investments that are both sound and profitable. One of the most interesting new investment opportunities is to invest in global trade itself.  That is - to be a part of the growth of the entire world market by investing in things that are part of the import and export of consumer goods.

While a lot of global trade these days happens online or in digital form, there is still a large need to invest in infrastructure and shipping systems so that the entire world can trade goods on a global scale. An interesting option for investing in the shipping industry is to make an investment directly into cargo containers, which are a major part of almost all globally traded goods. Consider this: for something to be transported from China, or East Asia, or South America into the North American or European markets, it was (most likely) shipped overseas on a container ship transporting thousands of cargo containers. This trade dependence presents an opportunity for investors to buy and lease out shipping containers to people and companies looking to access the global markets. Taking this approach, investors simply purchase their cargo containers and a container leasing broker handles all of the logistics associated with managing the investor's fleet. As the container owner, you simply collect monthly dividends on the usage of your container, while international companies pay the leasing company to rent your asset.

Albeit an increasingly popular approach, investing in shipping containers is among the alternative investments available to investors, it is not the only way investors can invest in global economic growth. In fact, there are several different ways to access these prospering markets through Exchange Traded Funds, by investing in green energy projects and/or short-term loans to businesses in developing nations and emerging markets.

Earning a Steady Income is an Appealing Investing Option

Everyone dreams of investing in something that makes money while also creating an overall increase in net worth. It is the motivation of the investment world and is an ingredient found in the world's most appealing investing options. Albeit traditional investments have been a disappointment, nowadays there are several alternatives for investors that can earn a steady profit, while also cont wealth.

Some investors hold onto stamps. Others buy vintage wines and reselling them. Although these are considered "alternative investments," neither produces income while the investment matures. In order to achieve that, investors have to look at assets that will be used WHILE growing their value. Asset purchases, such as income properties/real estate, are an example of investments that generate a monthly income for the owner (because they are being used) while at the same time are steadily increasing in value; or at the very least preserve their value.

If you are considering pursuing an alternative investment, consider looking for options that allow you to earn a steady profit each month (or week, quarterly, etc.) AND helps you build wealth. Wine may be a fun alternative investment, but it will not make you any money if it is used .. it will disappear! Stamps can only ever be traded among collectors, because once they are used they lose all value. On the other hand, real estate and shipping containers earn money consistently for investors.

Earning a steady profit should be a central aspect of your investment strategy, especially if you are looking to increase your net worth quickly and/or you have a desire to re-invest your earnings. Ideally, once you have established a large enough network of investment assets, your portfolio should pay out enough dividends for a very nice and consistent profit.

7 More Helpful Tips For Investing in Alternative Investments

In today’s volatile marketplace, it is a great investment strategy to consider alternative investment opportunities.

There are several ways to avoid traditional investments and invest in alternatives to the stock market or mutual funds. Depending on your willingness to take risks, the rewards can be quite impressive. A good alternative investment strategy begins with doing a little research first.

With that being said, here are 7 more of my alternative investment tips that can help you determine your best investment strategy, if you are considering the alternatives to traditional investments:
  1. Do your research: As you are investing your own money, it is vital that you learn how to do your own research on investment opportunities. There is a lot of information available on the Internet and sometimes it can be tricky to make your way through the pile. Take the time to read about the opportunities by visiting several websites, reading investor reviews and look for trusted authors and testimonials.
  2. Find markets that are growing: Emerging Markets tend to be found in Latin America (Brazil, Chile etc) and East Asia (China, Taiwan, India) as well as some up-and-coming markets in Eastern Europe such as Belarus and Ukraine. These markets are growing at a much higher rate than mature markets such as North America and provide several appealing investing options.
  3. Find trusted investment sources: Emerging markets tend to have several high-growth investment opportunities such as energy, real estate and asset ownership, such as shipping container investments. Depending on the market you choose – these main 3 options are good, known investment vehicles.
  4. Invest in assets: If you can, find investment opportunities that are helping to purchase assets. Make sure the asset does not have a high depreciation value (such as solar panels) and that you are purchasing assets through a known entity, with a proven track record of great customer service.
  5. Decide if you want long-term of short-term liquidity: Many emerging market economies allow for much shorter liquidity timelines, such as daily, weekly or monthly returns. Many countries in East Asia allow for monthly returns on an asset purchase, or a complete loan repayment within days of investing. This is done to help encourage outside investing and usually involves little red-tape.
  6. Start small: If you are new to the East Asia or Latin America investment world, start small with a modest investment and track the results. Once you see your return and how easy it was to manage, then consider introducing more funds.
  7. Invest in more than one industry: Any good portfolio manager will tell you to investment in diverse interests and industries. The same is true for introducing alternative investment opportunities.
In my mind, investors who follow these additional tips for investing in alternatives should have little (if any) trouble discovering something that matches their tolerance for investment risk, and sets the foundation for a good, long-term investment strategy.

Cargo Containers Offer Alternative for Discouraged Investors

Non-traditional investments are emerging as a viable alternative and providing hope for investors who have been discouraged by poorly performing markets.

With an ever-increasing number of investors placing their traditional investments on the shelf, alternative investment offerings are emerging as an appealing investment option and providing hope for investors who have been discouraged by poor communication, and mounting fears of losing their principle. At this point, the investment community is seeking a positive change in their investing portfolio's performance and are favoring the move to the sizable returns and transparency, offered by popular alternative investments.

In the past, understanding and addressing the needs of the global investment community is something that very few traditional investment offerings have spent any time doing. The lack of transparency in most traditional investment options has investors discouraged, upset and seeking immediate change. Answering the call for swift improvements, container investment providers have presented an investing opportunity for apprehensive investors that will allow them to enjoy a great investment, complete with security, dependable residual payments and simple liquidity. For many investors, investing in shipping containers is seen as more of a business opportunity than a traditional investment, because of the close relationship container owners (investors) maintain with their investment/business partners. This open dialogue is a welcome change from the disappointing communication that is common among traditional investing offerings.

When making a investment, container investors can immediately enjoy the benefits of established and highly profitable shipping leases. These agreements not only provide safe and steady investment returns, they also protect investors against the liability with regards to the the container's contents and against any damage to the shipping containers themselves, thus preserving the investor's principle. Furthermore, these shipping leases have been negotiated with reputable international companies and thus provide an asset that provides a long-term investment income; for happy shipping container owners and investors. Even if they choose to improve their poor communication with upset investors, traditional investments still cannot deliver the same level of performance and great investment returns, that are consistently enjoyed by shipping container investors.

No Chance Gold Values Will Recapture Their Peak Anytime Soon

The question on the mind of many analysts is whether or not gold is the kind of non-correlated, alternative asset that investors should be holding now. Especially when they stop to consider gold's roller coaster track record that includes soaring prices from 2004 to 2011, and then the sharp drop of more than 40 percent in 2013.

For hundreds of years, gold has been an asset that is held as protection against "worst possible outcomes." The truth be told, gold will reach its highest price when there are increasing concerns about the economic well-being of the United States, likely because the U.S. represents the biggest economy and largest pool of wealth in the world and investors want a good investment to preserve their wealth. That being said, the American federal government has appeared more effective as of late and even the housing market in the United States has shown real signs of improvement. These things considered, investors are left without the worries that traditionally drive values upward. Recently, gold prices have slid back from an early 2014 climb and now stand just a few percentage points higher for the year.

With the rising number of alternative investment strategies for investors to pursue, analysts are growing skeptical of whether including gold as an asset class will benefit investors. In fact, some are even suggesting that "it’s not an ideal hedge" anymore and that "there’s no chance that gold prices will recapture their peak anytime soon."

Pacific Tycoon Offers A Unique Alternative Investment Strategy

Prior to becoming available to the public, an investment in shipping containers was reserved for the affluent and wealthy. Pacific Tycoon has contributed significantly to the accessibility to this alternative investment strategy, providing a service where regular investors can own, lease and rent shipping containers, in return for a healthy profit. Pacific Tycoon is a Hong Kong-based company that specialises in high yield container leasing, which has become an emerging industry that is demand led and dictated by the global economy and international trade. As a result, given the recovering global economy and steadily increasing international trade volumes, investing in shipping containers with Pacific Tycoon provides you with an incredibly unique opportunity that many have already done before you.

The container shipping industry is an emerging area of interest for many investors to invest their capital in as the industry is consistently growing since the financial crash of 2008-2009. Since then, there has been a steady increase in demand for shipping containers worldwide, giving investors a unique chance to capitalize on this strategy. Almost 90 percent of all international trade is conducted through shipping containers and there are the least risks involved as compared to other investment strategies which have high rates of return (RoR) but have massive risks associated with them. Investing in shipping containers provides a steady RoR with minimized risk. Pacific Tycoon have built their brand and company on this very foundation and intends to provide investors with a risk-free and steady return on their investment.

Now, let's get to the details about what Pacific Tycoon offers potential investors. Pacific Tycoon offers a container leasing investment strategy which provides a guaranteed return on your initial capital of up to a modest 12%. What happens next is Pacific Tycoon leases containers owned by individuals and rents them to container shipping industry leaders, therefore when the container owner has purchased one or more containers, he/she enables Pacific Tycoon to rent them out to awaiting cargo transporters, providing him/her with a return from the net rental income. This process may seem complicated but really is very simple. With an initial investment of just $4100 USD, your investment provides you with one container that Pacific Tycoon leases out to thousands of awaiting international businesses, enabling the transport of their goods across the world. Remember, 90% of world trade is moving in shipping containers, therefore the demand is almost always positively correlated with the current global shipping industry.

Pacific Tycoon offers two primary investment options.
  1. The first option is a 12% Guaranteed Lease. With this option, Pacific Tycoon leases containers and rents them out to the shipping Industry under long term contracts that provide a guaranteed income equal to 12% of the container purchase price. In addition, because these contracts are longstanding and secured, Pacific Tycoon will specifically provide you with guaranteed security on your container lease returns.
  2. The second investment option is a Maximised Rental Agreement. With this option, Pacific Tycoon rents the containers to cargo transporters in urgent need of them to honor their transportation contracts. Due to massive demand, restricted supply and the absolute necessity to deliver the cargos, these rental contracts produce much greater income. Under these contracts, the returns are not guaranteed yet have always delivered higher returns than the guaranteed lease.
All in all, Pacific Tycoon allows anyone to invest in shipping containers and provides two primary investment options that either guarantee a steady return or takes a small risk to make a larger return. Either way, both strategies have been proven successful and Pacific Tycoon is on their way to becoming an industry-leader in the container shipping industry.

Do Traditional Investments Offer Steady Profit/Peace of Mind?

The market's ongoing volatility has driven much of the investment community to seek alternative investing options, that can offer them steady returns and peace of mind.

With the everyday uncertainty in the stock market and repeated disappointment in gold and other precious metals, investors are disheartened to say the very least. The market's ongoing volatility has driven much of the investment community to seek-out other investing options, that have demonstrated they can deliver steady returns AND peace of mind. As traditional investments continue to under-perform, these two ingredients (steady returns and peace of mind) are becoming increasingly important to investment-seekers everywhere.

Investors Want Steady Returns.

Nowadays investors are keeping a watchful eye over their investments' performance and their rate of return. For the most part, investors like steady profits that they can see and count often. Offerings like container investments produce monthly returns, that can be used to fund other investment endeavors or supplement income. On the other hand, long-term investments that involve bank rates, bonds, currencies and/or real estate are (often) subject to a number of political and economic risks, that can have a seriously damaging effect.

Investors Want Peace of Mind.

The bottom-line: investors do not want to have to worry about their investments. The worrying should be done before the decision is made to invest. With that being said, when seeking a good investment, one of the criteria is definitely peace of mind. Understanding how an investment works, how and when investment returns are paid, as well as liquidity options, have grown increasingly important to investment-seekers. Once those details have been established, peace of mind will follow.

When reviewing an offer to invest, it is wise for investors to focus on satisfying the criteria above (steady returns and peace of mind), especially if they hope to move painlessly from the traditional investment roller-coaster ride, to the sanctuary of proven alternative investments.

Many Investing Alternatives Are Proving to be Great Investments

From beating rising inflation, to lowering risk and delivering steady returns, alternative investments are proving that they are a great investing option.

I have spoken about alternatives for investors on several occasions, and while one must carefully review investments, confidently knowing which ones are the best investments is what assures great asset selection. Many investment alternatives are proving to be a great option, and even though they should be a small portion of your overall portfolio, there can be lucrative returns to be made with the right selection; at the right time.

In a 2012 study of luxury goods, found in Knight Frank's Luxury Investment Index, it was reported that over the course of ten years; as much as a whopping 174% average return was taken on several product categories. Classic cars, antique watches and other luxury goods can make for a good investment, as demand for these assets steadfast. Rare, special collector coins yielded a huge return of more than 225%, and classic cars leading the way with a 430% return over a ten year period.  Returns like these are unusual, but they are there if one has the appetite for these type of alternatives.

Real estate internationally is showing great returns of late as the UK's luxury real estate market has seen growth for the past two years, with Asian and Mid-East investors scooping up commercial and residential properties throughout London and surrounding countryside.  It's far from over, and can provide great investment return.

A Little More on Classic Cars: This excerpt taken from The Guardian – Shortcuts Blog.

According to Talacrest, an Ascot-based specialist that has sold some $600m-worth of classic Ferraris, vintage Ferraris are "the Picassos of the car world", increasingly seen as a rock-solid investment. The man believed to have sold this particular model, Jon Hunt, founder of Foxton's estate agency, wouldn't quibble with that: he appears to have made £4.5 million on the car in the four years he owned it.

But here's the thing: in 1963, the same car cost £6,000. As investments go, could you have done any better? If you had hung on to the car, your initial outlay would have multiplied nearly 3,400 times. So where is it safest to put your money?

Working out the returns on long-term investments is not easy. For one thing, it is necessary to choose investments that beat inflation and preserve your personal wealth.  According to, £6,000 in 1963 is the equivalent of just over £100,000 now. But all the same, in 1963 an ounce of gold cost $35.09 (£22). In late January 2014 it was trading at $1,700 (£1,069) an ounce – an unbelievable 49-fold increase.

Then, there are the "alternatives to alternatives" which provide a lower risk, albeit lower return, but growth through conservatism is a strategy for many investors. Some of these include:
  • Convertible Mutual Funds
  • High Yield Bonds
  • Short Equity
Not to be forgotten, in recent years there have been numerous other alternative product categories that are emerging as good alternatives for investors, as well. For example, fueled by the increase in demand for durable goods globally, Intermodal transport companies have proven to deliver good investment returns; throughout the worldwide economic downturn. Moreover, with the worldwide shipping port and infrastructure investments, as well as the expansion of the Panama Canal, the maritime and railway transportation of cargo containers is expected to see dramatic growth. Thus, it is expected that investors will discover excellent vehicles for long-term investment success.

Investors Seek Alternatives to Traditional Investing Options

Every investor has felt the urge to seek alternatives to traditional investing options and live life on the proverbial edge.  It’s no secret that investing in traditional stocks, bonds and mutual funds can sometimes become a bit boring.   How one can profit from alternatives can sometimes be more difficult at the early going, especially if the investor is a novice.  It is always wise to seek guidance along the path to knowledge of non-traditional investing.  Have a professional fund manager, or investment broker review alternative investment vehicles with you, at least in the beginning. Boring can be predictable, and non-traditional investment options hold an elevated risk. Alternatives may not be for everyone.

Alternative vs. Traditional Investments

Morgan Stanley produced a great tool highlighting the inherent differences between Alternative and Traditional investments, as seen below. Their opinion concludes that Alternatives can lower volatility and add diversification 1 to an investor’s portfolio.

Alternatives for Investors

Alternative investment strategies are considered those that are beyond the reach of equity and traditional fixed-income markets. What were once high risk, low participation investment vehicles: venture capital, real estate, hedge funds and (NTMF) non-traditional mutual funds, are now just some of the options today’s investors may find lucrative.  Other alternatives for investors are infrastructure funds, climate related investments, global shipping containers, and hard assets, like precious metals, oil and gas, to name a few. One can profit from the economic growth right here at home, say, fracking operations. There is even a belief that sports betting and other forms of gambling are viable and legal alternatives for investors. The jury is out on that one, as far as I am concerned. Speaking of hedge funds, in September of this past year, Bloomberg reported, "Billionaire investor Warren Buffett compared the U.S. Federal Reserve to a hedge fund because of the central bank’s ability to profit from bond purchases while accumulating a balance sheet of more than $3 trillion." Now that is an alternative of a different color. Another alternative for investors lies beyond domestic shores.  An investor can profit from the economic growth in countries experiencing rapid evolution in stability. Rising incomes per capita and lower cost of food are great indicators of possible investment locations.  Imagine investing in the implementation of electricity to a Sub-Saharan country, thereby opening up opportunities for lifting millions from poverty. Some are not even recognized as alternative investments.  Berkshire Hathaway (BRK) is a fine example of what is considered traditional, yet is in fact managed like an alternative. Blending a variety of companies and industries with derivatives under a single brand, thereby managing risk, and sold on the stock exchange make for a non-traditional alternative.

Caveats to Alternative Investing

There are many alternative investment opportunities which have a steep barrier to entry. That is, although they might have less regulation over them, they may have significantly higher minimums, performance and management fees than do ETFs and mutual funds. Being subject to less regulation may sound appealing, but it also allows limiting published information and financial performance data that is much less than is ideal. Because alternative investing requires a significant amount of knowledge and experience, schedule a review of alternative investments with an experienced certified financial planner or investment brokerage.   As for alternative investing options for retirement go, the use of your 401K or IRA can cost dearly when a prohibited transaction occurs.  Because an individual cannot make financial gains directly in such a scenario, avoiding real estate investing is a sound idea.  Failing to follow regulation may result in higher tax burden, as doing so may remove the tax deferred status of your portfolio.   In the end, only the investor can decide which investment vehicles are the right fit.  There are always new strategies and tactics emerging, so if not now, some day the right alternative may present itself.