The term alternative investments doesn’t have the same meaning it once did. In fact, perhaps not too long ago, if someone came to you with the proposition of investing in something alternative, and you were playing a word association game at the time, terms that might also pop into your head include risky, dubious or even strange.
The fact is that today’s world of investments isn’t what it was thirty years ago, twenty years ago, or even as recently as a decade ago. Indeed, there has been what one can consider a significant shift from so-called traditional investments to the growing category of alternative investing. Let me explain.
A shift from stocks and bonds
Back in the day, so-called traditional investments, including bonds and stocks, could deliver some relatively high yields with relatively low risks. However, in today’s investment landscape, finding these high-yield, low-risk opportunities among stocks and bonds has become an exceedingly difficult proposition. Bond yields are not what they used to be, and neither are “high income” stocks, which now often have lower values than yesteryear, and correspondingly lower-paying dividends.
As a result, investors seeking the golden grail of high yields with lower risk have had to look elsewhere, and that’s where alternative investment firms have filled the gap — not with fly-by-night investment schemes and tricks, but with proven investment strategies that meet the needs of increasingly demanding investors.
Finding the right alternatives
The trick, however, is that these alternative investments are more challenging to manage, so they require a developed expertise in the field, whether the underlying investments involve real estate, mortgages, private-debt funds — you name it.
Consequently, investors need to be more discriminating than ever to find these rewarding investment opportunities. But, if the right opportunities are found, and are managed by qualified experts, than the returns are as formidable as any traditional investment has ever been, and more.
