There are many myths about alternative investments – even the concept is misconstrued by many people, given the lack of mainstream awareness about these. The term is assumed to be some form of hedge funds or other high-risk, exotic funds that only high networth individuals and large institutions have access to. In reality, alternative investments are widely accessible and have a place in nearly every portfolio.
Some other misconceptions surrounding these investments are the following:
Myth: Alternatives are considered a unique asset class
Others see alternative investment options as standalone asset types that are distinct from traditional asset classes, including stocks or bonds. Investing in alternatives actually represents different approaches to investment that span various markets and vehicles.
Myth: Alternatives are inherently more risky and volatile than traditional investments
Some alternative investment options can indeed experience higher volatility and illiquidity, however, they are not always worse than traditional asset classes. Additionally, alternative investments can be used as portfolio diversifiers, reducing overall volatility.
Myth: Investing in a single alternative class will diversify the portfolio
There are people who assume that investing in one type of hedge fund or private equity is enough to diversify a portfolio that will withstand the market climate. As a matter of fact, a single alternative investment strategy will concentrate risk exposures. Multiple strategies will mitigate concentration risks.
Chicago-based Charles F. Whitman is the founder of Whitman Asset Management, a firm that provides alternative investment programs that target exceptional risk-adjusted returns. For more insights regarding alternative investment, follow this Twitter account.
2016 has been pretty interesting for investors. The effects of political shifts in certain countries reverberated worldwide. The market has been pretty unpredictable.
2017 is still in its infancy, so there is still time to be wise a propos certain market trends.
One economic trend would be a heightened emphasis on United State stocks. Of course, one should not abandon international equities altogether, but it will pay to consider giving more weight to US companies. This is mainly driven by the assumption of power of President Donald Trump.
Forex-wise, 2017 could also be the year of a stronger US dollar. To minimize some of the risks that will drag in, investors might want to look into certain mid-cap and small-cap US companies because they have less of an overseas focus compared to their larger-cap counterparts.
Lastly, one should never discount the benefits of a globally diversified portfolio. This is a result of the anticipated stimulation measures on the part of central banks across the globe to promote further economic growth. Allocations to international developed and emerging markets are therefore strongly encouraged.
Charles Whitman is an investment strategist based in Chicago. He is the founder of Whitman Asset Management, a firm providing alternative investment programs that target exceptional risk-adjusted returns. For more information, visit this website.
It’s very easy to make mistakes when it comes to money. Wrong moves in the middle of investing and managing assets are very common. Some people are lucky when their mistakes aren’t too costly. But even with small errors in judgment, when done one after another, mistakes pile up. And these things are avoidable. Here are two mistakes people commit when handling assets.
The credit card factor
The irresponsible usage of credit cards can bring a bank account to ruin fast. People who use credit cards should be extra cautious. Credit cards should almost always be used only when cash is low, and seldom, if ever, on necessities. People should check interest rates as often as they can, and should not spend more than what he or she earns.
The urge to spend
Unnecessary things are usually the most tempting. An expensive dinner, an exotic coffee blend, a pair of shoes that’ll only be worn five times a year – these are all fine and good as rewards, but if one cannot control the urge to spend, then game over can come very quickly. If people added up the prices of all these items, they’d see an amount well over a thousand dollars yearly – a thousand dollars that could’ve been used to pay off very important debts or start an investment portfolio.
Charles F. Whitman is a Chicago-based investment strategist who uses his investment and technical know-how to help his clients grow their portfolio. Charles also founded Whitman Asset Management. Learn more about him and his work by visiting this LinkedIn account.
Investing in agriculture is always a good idea. Farmland knows no drop in usefulness, and it is especially valuable during financial crises. It is a stable source of profit for investors. Even at its weakest, the agricultural industry is still a big advantage on any portfolio.
A profitable and stable area for investors to consider is the grain complex, which includes corn, soybeans, wheat, and oats. These commodities fit into conventional investment wisdom because majority of human beings are regular consumers of grain. Coffee and sugar are also good investments, but unlike grain (and objectively speaking), people can live without coffee and sugar. Even the livestock such as poultry and pork, which humans also consume, need grain.
Speaking of poultry, pork, and cattle, livestock too could fatten portfolios. With the world population booming, the amount of food being consumed is at an all-time high.
There are a few ways to invest in agriculture without the need to own a farm. One of the most beneficial routes investors can take is by taking out a farming-focused real estate investment trust or an REIT, which allows them to buy farms for lease to farmers. REITs are potentially more diverse and generally more liquid than having a farm. REITs can easily be snatched in stock exchanges, and they cost a lot less than purchasing a real farm, easing up the need for investment capital.
Charles F. Whitman is a Chicago-based investment strategist who helps his clients boost their portfolios. Whitman is also the founder of Whitman Asset Management. Just recently, he was a speaker at the USDA National Agriculture Conference. Learn more about Charles F. Whitman and his work by visiting this LinkedIn account.
A subset of private equity investment, venture capital is one of the alternative investments that carry a potential for long-term growth. It specializes in financing small, early-stage, or developing businesses, which typically do not have access to capital markets or public financing. Funds gained from venture capitals are, therefore, an essential source of finances for these companies.
Venture capital is a risky asset class, but its return on investment can be substantially high upon the event of successful liquidity. Famous startups that gained from early venture capital investors are Google, Facebook, and Twitter.
One of the advantages for venture capital investors, aside from the potential for high profitability, is the opportunity to provide more than financial resources to the startup. Valuable guidance and consultation can help the firm with its decision-making, as well as legal, tax, and personnel matters.
On the other hand, a drawback with this alternative investment is the risk involved in investing in a company that has limited operating history, and, at times, high upfront costs. As for the startup, it will relinquish control, management, and a bit of ownership stake to the venture capital investor.
But due diligence in investigating the business model, products or services offered, competitive advantages, and management and operating history, among others, can result in a mutually beneficial venture capital partnership.
Charles F. Whitman is an investment strategist based in Chicago. He founded Whitman Asset Management, a firm that provides its clients with alternative investment programs that target exceptional risk-adjusted returns. To know more about him and his firm, visit this website.
ETFs or exchange traded funds play a significant role in the global market because these are funds that track indexes like the widely known S&P 500, NASDAQ-100 Index, and Dow Jones. ETF is an efficient tool that gives investors access to different markets in the world. It tracks an index, bonds, commodities, or blend of assets. In addition, because its shares can be bought and sold, it undergoes price changes throughout the day.
Purchasing ETF shares means buying shares of a caliber portfolio that monitors the earnings and returns of its native index. When investors decide to buy ETF shares, they get the power to sell short, buy on margin, and acquire access to portfolios that contain diversification of an index fund. Since there are no minimum deposit requirements in ETF, investors can purchase small amounts of share. Most ETF investors claim that ETF is better than the traditional mutual funds because of the lower costs, better tax efficiency and a lot of other reasons.
As an investment strategist, Charles F. Whitman is an investment strategist and trader from Chicago. He is the founder of Whitman Asset Management, a firm that specializes in alternative investment programs that target exceptional risk-adjusted returns. Mr. Whitman is renowned in his commitment to helping his clients find investments with which to grow their wealth. For more on him and his company, visit this website.