Best
Alternative Investments
An
“alternative investment”, by definition,
is simply any kind of investment product other
than the traditional stocks, bonds, property or
cash. It can be a foodstuff or a wine, usually
with some quality value attached to it, or it
could be antiques, stamps or works of art to name
but a few. These are known as tangible assets.
Alternatively it might be a financial asset such
as commodities, hedge funds, venture capital,
derivatives or private equity.
One
of the reasons why serious investors support alternatives
is as a means of diversifying their financial
portfolio for the purposes of risk minimisation.
As there is little correlation between traditional
investments and these alternatives a major deterioration
in the fortunes of one need not affect the performance
of the other.
From
this list hedge funds may on the surface appear
to be the odd one out as they do indeed invest
in listed securities. However the manner of their
investment is such that they provide an absolute
return through market neutral strategies, and
as such they operate outside of the markets they
invest in.