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.

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.

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.

Many Alternative Investments Are Supported by Investor Reviews

Traditional investments that once were the pillars of an investor's portfolio, are systematically being replaced with alternative investment offerings that have proven they can perform much better, under the pressures of the global economy. The grip that stocks and bonds once held on the investment community is coming undone and investors are apprehensively venturing into new areas of investing, commonly referred to as alternative investments.

Many of these alternatives were once secret investments held by affluent investors and influential investment firms, until the Global Financial Crisis created a need for these alternative investments to be liquidated to cover losses sustained in traditional assets. Since their introduction into the mainstream market, alternatives have been rising in popularity and demand, as the investment community increasingly recognizes the value in including offerings like shipping container investments from Pacific Tycoon; to create a well balanced portfolio.

After suffering significant losses in traditional markets during the last half a decade, investors are no longer relying solely on the advice of their financial advisers and stock brokers. Instead, many are conducting their own research and reading through pages and pages of information, to ensure they make an education and confident investment decision. In most cases, investment-seekers can gain valuable insight about alternative offerings from perusing investors' investment reviews, and then effectively using that first-hand investing experience and information to decide whether or not to invest.

The investment community is home to volumes of valuable information that can lead investors in the right direction, as they part ways with traditional investments and embark on a journey to discover their investing alternatives.

This is What Advisers Look For in Alternative Investments

Alternative investments, a relatively new asset class for investors to consider, has been steadily growing in demand since 2008. Essentially, alternative investments are asset classes that do not correlate with traditional assets such as stocks, bonds and real estate. They typically follow their own cycles and as a result, introducing alternative asset classes could potentially help volatility in investment holdings by reducing the overall exposure to risks, especially when traditional asset classes are performing poorly. Subsequently, investment advisers and wealth managers have been paying much closer attention to this asset class, particularly as their investor clients become increasingly apprehensive about traditional investment offerings; in a sluggish global economy.

Moreover, a recent (2013) analysis conducted by Franklin Square Capital Partners revealed that advisers prefer alternative-investment providers with a high level of integrity and transparency, with 92% ranking that factor as one of the top three most important criteria considered, when selecting a provider. In addition, more than 90% also said strong, consistent performance that offered steady investment returns was another essential characteristic. Another essential factor advisers look for in the alternative asset class is competitive pricing, and a product's correlation to other asset classes. Additionally, the survey revealed thirty-eight percent of the advisers said that they would choose a provider based on the liquidity of the product. These factors advisers consider when investing into alternatives are typically characteristics that investors are seeking due to the volatility and tough conditions of the financial markets.

Historically, the most profitable alternative investments have been an investment secret of high-net worth and institutional investors, but nowadays they are far more available to an eager international investment community. Alternative investments range from private equity to hedge funds to commodities to antiques and can complement a variety of investing strategies. The most important aspect to recognize, is that alternative investments are designed to complement a well-founded portfolio, rather than to serve as the focal point.

Alternative Investment Allocations And Opportunities Increase

Although the stock market dropped 55 per cent at the beginning of the global financial crisis, there were some investors who benefited from their heavy investments in alternatives, which (as we know now) fared much better than stocks and bonds. It would seem that the traditional 60/40 model failed or under-performed in 2008. In fact, the studies that followed showed that allotting 20 to 30 per cent of a portfolio to alternative investments, resulted in both a higher return and a better standard deviation. It is important to note however, that the suggestion of a 20 per cent maximum for the allocation of alternatives in a portfolio is not a hard-and-fast maximum, but rather a widely recognized guideline. Allotting more or less, is at the discretion of the individual investor.

According to a new report by the research firm Cerulli Associates, advisers are increasingly recommending alternative strategies to their clients, including retail clients, with 25 per cent reporting that they have plans to increase their allocations to alternative offerings. The fact of the matter is that there is a lot of benefits to alternative investments, including: relatively high degree of transparency, liquidity, and the costs are much lower. These advantages make it possible for almost anyone, with even a small amount of capital, to invest in alternatives.

"In 2009, we had $500 million in alternative mutual fund assets ... Today, it's $1.5 billion, and that's just adviser-directed. So that's a three-fold increase, and it doesn't include alternative allocations within firm-based models, which have also grown."- Co-Head of Alternative Investments at Raymond James.

The demand for alternative investments at the retail and mass-affluent client level has produced an explosion in new alternative offerings; as well as a wider range of investments within those opportunities. Morningstar, in its latest report on alternative funds (2013), notes that an estimated $19.7 billion moved into alternative assets over the past year alone, with much of that money reportedly coming out of equities. To give an indication of the rising popularity of alternative investments, only 4 per cent of advisers said they do not use alternatives in portfolios, down substantially from the 17 per cent who answered that question back in 2008 (Barron's and Morningstar 2013).

Alternatives Expected to Comprise 14% of Mutual Fund Assets

Asset managers around the world, who handle both institutional and retail accounts, have been increasingly focused on alternative assets. In fact, it was recently reported (Cerulli Associates) that between 8 and 10 life insurers said that they were actively considering increasing their allocation of assets toward alternative strategies, as they look for dependable sources of additional yield. Moreover, in the October 2013 report from Cerulli Associates, the data suggested that alternative mutual funds can be expected to comprise approximately 14 percent of all mutual fund assets, in the coming decade.

Since the financial crisis of 2008, institutions and advisers have been under immense pressure to increase returns while keeping exposure to risk unchanged or at least held at a minimum. As a result of this increasing pressure, many have shifted their focus the alternative assets that have been steadily attracting interest from retail and institutional investors seeking portfolio diversification, enhanced returns and (of course) manageable risk. In addition, the report's extensive research reveals that more than 50 percent of surveyed asset managers suggested that alternative investments are either more important than other initiatives or the most important initiative, both within the retail and institutional environment. Moreover, 60 per cent of managers have said the same ingredients will be followed for the portfolios of their high net worth clients, as well.

Most of the international investment community has taken notice of the fact that alternative investments have been growing in popularity exponentially over the course of the last couple of years. As a result of the increase in demand, the value of many alternative assets has been increasing steadily as well. Investors have noticed this too, especially when alternatives are compared to the S&P 500. This is especially appealing to investment-seekers, as they look for opportunities that will protect their investment principle and beat rising inflation, as well as address the skyrocketing cost of living.