==== ====Heres a great site to invest inhttp://www.ultraxproject.com/known25==== ====Your investment portfolio will typically include conventional investments such as stocks and bondsboth equally important parts of a solid, long-term investment strategy. But, there are many otherless-typical investments that can supplement your portfolio and provide you with opportunities toreduce some of the effects of market fluctuations. Consider alternative investments such ascommodities, hedge funds, mutual funds with alternative strategies, and futures to round off yourportfolio.What are alternative investments?Alternative investments are asset classes that generally dont move together with traditional equityand fixed income markets. They usually follow their own cycles. As a result, alternative assetclasses have a low correlation with standard asset classes; therefore they may help diversify yourportfolio by reducing the overall volatility of the portfolio when traditional asset classes such asstocks and bonds are performing poorly.Historically, alternative investments have been restricted to high-net worth individuals andinstitutional investors, but these days they are far more available to a wider audience. Alternativeinvestments range from real estate to hedge funds to commodities and can complement a varietyof investing strategies. However, they are designed to complement a well-founded portfolio ratherthan to serve as the focal point of the portfolio.Most people are attracted to alternative investment because they may yield a higher return thantraditional investments, but note that potentially higher returns also may carry higher risks withthem. Whats important to note is that alternative investments may be more illiquid than theirconventional counterparts - they cannot be sold readily like stocks and bonds - and some mayneed to be held for a longer time horizon. Additionally, there may be unique fees or taxconsequences.Alternative investment options for your portfolioThere are many investment products available today and it sometimes may be difficult to clearlyidentify which investments are conventional or alternative. But below are is a list of commonalternative investments along with their potential benefits and risks.GoldIncluding a small portion of your portfolio toward precious metals such as gold or silver may offsetthe performance of other assets in the portfolio such as stocks and bonds, because preciousmetals typically dont move in tandem with conventional investments.Gold is typically viewed as a hedge against inflation and currency fluctuations. So when inflationeffects the purchasing power of a currency - say the dollar weakens against the euro - gold prices
tend to rise. As a result, investors place their money in gold during economic and marketdownturns.Investing in gold can be accomplished in several ways, including futures funds, exchange-tradedfunds, mutual funds, bars, and coins. Nevertheless, since precious metals make up a small sector,prices often change dramatically. This type of volatility can create opportunities for investors in theform of high returns but it can equally result in dramatic losses.Hedge fund offeringsHedge funds have historically been available only to high-net-worth individuals and institutions.Hedge funds are investment pools that manage money for institutions like banks, insurancecompanies, as well as individuals who meet the federal definition of a "qualified purchaser" interms of net worth and income.Hedge funds are typically organized as limited partnerships where the fund managers are thegeneral partners and the investors are the limited partners. Hedge fund investments tend to havelimited liquidity on a scheduled basis as a result these alternative investments are subject tospecial regulatory requirements different from mutual funds.Funds of hedge funds invest in a variety of hedge funds with many different strategies and assetclasses with the purpose of reducing overall fund risk through increased diversification. Fund ofhedge funds are available to investors that meet the accredited net worth standards of at least $1million. Fees of hedge funds are higher because of the type of portfolio management andincreased trading costs.Fund of hedge funds are registered with the SEC under the Investment Company Act of 1940 andas securities under the Securities Act of 1933. They may also come in the form of a privateoffering which will need to adhere to stricter accredited investor standards. Fund of hedge fundscan be complicated investment vehicles which often use leverage, lack transparency, may besubject to restrictions, and may include other speculative practices.Mutual funds with alternative strategiesMutual funds are offered in many asset categories, including real estate and commodities. Somemutual funds can mimic hedge fund strategies and may be a good option if youre interested inalternative investments but dont meet the accredited investor standards.In contrast to hedge funds and fund of hedge funds with their higher fees and possible restrictedliquidity, these types of mutual funds are relatively low cost and are very liquid - they can easily bebought or sold in a public market. As a result they are accessible to a wider range of investors andtherefore mutual funds with alternative strategies are prohibited by law in using high leveraging toboost yields as is common with many hedge funds.Nevertheless, alternative mutual funds do use aspects of hedge fund investing such as employingboth long- and short- investment tactics, trading complex derivative products, and short selling. Ifyou are an investor that is looking to help offset market swings or specific sector swings and youunderstand the risks that may be involved investing in alternative investments, alternative mutualfunds may be something to consider adding to your portfolio.
Managed futures fundsManaged futures funds are formed for the purpose of investing assets in the investment vehiclesand trading strategies deemed appropriate by commodity trading advisors (CTAs). Thesespecialized money managers use futures, forwards, options contracts and other derivate productstraded in U.S. and global markets as their investment vehicles. CTAs are required to be licensedand are subject to the regulations of the National Futures Association and the CommoditiesTrading Futures Commission (CFTC).Managed futures are speculative in nature, involving high risks, may carry higher fees, and havelimited liquidity. Nevertheless, managed futures investments have been popular investments forhigh-net-worth individuals and institutional investors for the past several decades. Their appealcomes from their ability to provide investors with greater portfolio diversity by increasing exposureto global investment opportunities and other sectors such as commodities.There are several categories of managed futures in terms of structure and investment objectives.They may be available to investors in the form of a private offering subject to higher accreditedinvestor standards according Regulation D guidelines of the Securities Act of 1933.Real estate investment trustsA popular type of alternative investment is commercial real estate. Until recently commercial realestate has been mostly inaccessible to retail investors and was widely enjoyed by high-net-worthindividuals and institutional investors for its potentially higher yields and diversification attributes.Since the inception of real estate investment trusts (REITs), investing in commercial real estatehas become available to wider range of investors.REITs pool money from investors and invest the funds in properties ranging from office buildingsto apartment complexes to hospitals and warehouses. REITs are offered to investors in two forms:traded and non-traded. Both offer exposure to commercial real estate assets.Publicly traded REITs can be easily bought and sold on a daily basis on active secondary market.However, they tend to be more volatile.Non-traded REITs are illiquid investments appropriate for investors with a long-term investmenttime horizon of at least 5 to 10 years. Non-traded REITs are not aligned with stock and bondmarket movements so they add great diversification to a portfolio.Other alternativesAlternative investment can also include assets such as art, gems, rare collectibles, and antiques.In addition, venture-capital funds are considered alternative investments. These alternativeinvestments can help provide investors with added diversification and can help balance outperformance across various market swings.Considering alternative investmentsAlternative investments can potentially boost your portfolios returns while helping you reducemarket exposure and overall portfolio volatility. However, because of a lack of a secondary marketfor some alternative investments and restricted liquidity for others, as well as the higher risksassociated with them, alternative investments should be used as complements to traditionalportfolios consisting of equities and fixed-income instruments.
Moreover, because alternative investments often require more professional management thanconventional investments, its important to look to experienced money managers for help such asyour Financial Advisor.Alternative investments include gold, real estate, hedge funds, funds of hedge funds, commoditiesalong with others and are generally used to round off your portfolios performance becausealternative investments are typically not correlated to traditional markets such as equities and fixedincome.Alternative investments are often illiquid, with longer investment time horizons and carry higherrisks, and often require professional money managers.Investors must meet a criteria outlined by the law, ranging from product to product, in order to takeadvantage of alternative investment opportunities.Alternative investments should generally be used to complement existing portfolios and strategiesconsisting of mainly stocks and fixed-income products.Isakov Planning Group financial advisors bring industry leading resources and expertise to helpclients pursue and achieve their goals. Along with expert market analysis from the firms topinvestment managers, your Isakov Planning Group financial advisor will work with you to developand deliver tailored solutions that can help you get on track and ultimately achieve your mostimportant objectives, whether youre looking to plan for retirement, build tax-free wealth, get yourkids through college, or build a lasting legacy for your family.Article Source:http://EzineArticles.com/?expert=Yulian_Isakov==== ====Heres a great site to invest inhttp://www.ultraxproject.com/known25==== ====