Alternative Investment StrategiesThe growth of alternative investment strategies has been considerable in recent years. For both institutional and private investors, it seems that alternative investments now constitutes a distinct class within their overall asset allocation. Good quality portfolio diversification is based on assets that are exposed to different risks. The alternative class, through the strategies and instruments it contains, provides this difference.The risks of a portfolio investing in alternative investments on its own or held as part as a diversified portfolio of equities and bonds is significantly lower compared to a portfolio of equities and bonds only. Such a portfolio used as a mean of diversification in a traditional portfolio allocation will boost the returns if the portfolio is merely invested in cash or function as a moderator in a portfolio invested in commodities, emerging markets. Investors today and in particular in these difficult times are looking for diversification, de-correlation, low volatility and good return. This is what alternative investments have been doing for some time now and there is also a future for these alternative investments in normal conditions too. Investing in collectibles is a viable and serious tool for investment diversification.
The list of alternative investments includes a class of the tangible assets: strategic and precious metals, fine and rare wines, art, collectors’ watches, diamonds and precious stones, manuscripts, art and vintage cars, ...
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