Thursday, 24 January 2013

Do You See Alternatives As An Essential Portfolio Addition?

There once was a time when diversifying an investment portfolio meant to shift certain stocks around, sprinkle in some bonds and CD’s and hope for the best. That was pre-2008 when that was pretty much the status quo. The stock market pretty well dominated the investment landscape. Since the United States banking scandal erupted and turned the global investment world upside-down, investors have had little choice but to look elsewhere if they wanted to generate positive returns on their investments. This is when alternative options actually began to come to prominence and many global financial firms were left with little or no choice but to adhere to the wishes of the investment community. That being, produce investment options that were more consistent and profitable, tangible and transparent.

In the past five years, while the stock markets have remained flat overall, alternative investments like hard assets have been delivering constant above-average yields and dependable alternatives for confused investors. This fact has not been lost on many global money managers as they have increased their alternative holdings in their client’s portfolios by as much as 50 per cent and some experts even agree that it doesn't hurt to have even more of a percentage. As a result, the overall returns have been extremely positive and the trend is continuing moving forward into 2013.

One of the main benefits of hard assets is that they are not directly correlated to the stock markets which makes them unaffected by inflationary pressures. In an investment portfolio, they act as a guard against traditional holdings such as stocks and bonds and it increases the odds of an overall positive return at the end of the day. In fact many investors have completely turned away from having any traditional options in their portfolios and have strictly gone the alternative route and many are very satisfied with their results. The days of the traditional investment formula for portfolios no longer apply for the average investor. Many investment-seekers are more educated and they want to, not only alleviate the risk factors, but eliminate them entirely; if they possibly can. One way to do this is to steer clear of risky stocks and bonds. Instead, investors should lean heavily on the alternative options that are making a commitment to investors and have consistently proven their worth in the market, particularly since 2008.

The global economy is growing and with it the demand for hard assets such as precious metals, real estate and even shipping containers for that matter, is rising alongside and investors all around the world have begun to take advantage of it; for their own gain. In the investment world, making a profit at the end of the day is all that matters to investors. These days, stocks and bonds just happen to be out-performed by the alternative investing options and investors are more than willing to take advantage of them.

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