Alternative investments are financial vehicles outside of stocks, bonds and cash. Here are some examples:
(1) Long-short funds (shorting a segment of the market means betting that an item will go down when 68% of the time they go up)
(2) Bear Market funds (expecting markets to go down, not up, the odds are against you unless you know ahead of time)
(3) Currency trades
(4) Managed future contracts (commodities-related with hedging strategies)
(5) Hedge funds (often expensive with 2% expenses and 20% share in profits)
(6) Merger/Arbitrage funds
(7) Distressed Debt
(8) Structured Notes
and, my favorite (just teasing):
(9) Absolute Return funds (sorry, no guarantees)
Do you need them? Most investors and those that work with me do not. Besides, many Errors & Omissions (E&O policies) do not cover these alternative investments without extra costs.
Alternatives to stocks, bonds and cash that may be useful, depending on your circumstances, might include:
(1) Real Estate Investment Trusts (REITS)
(2) Emerging Markets
(3) TIPS = Treasury Inflation-Protected Securities (though, I have my doubts about whether the CPI (and therefore TIPS) is a good measure to base your own personal inflation rate)
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.