The appeal of alternatives

There's an allure to alternative investments.

Returns are often much higher than the traditional asset classes, though that’s at higher risk, and most often alternative investments provide excellent diversification, as it tends to run contra to assets such as equities.

Alternative investments can also be more interesting than conventional investments. That’s not to say an equities portfolio is boring: in the current volatile market it’s probably nail-biting. But alternative investments have that interest factor that counts for a lot of their appeal.

We examine the main alternative investment classes in the pages that follow – from hedge funds to art.

What stands out is the potential investor needs some special knowledge of the asset and should be prepared to do a lot of homework to find out more.

Like all investments, expertise puts the investor one step ahead – but nowhere more so than alternative investments.

It’s also easy for the investor to cross the line between investment and passion.

Don’t assume the rare painting or Twenties Rolls-Royce you bought as an investment will remain an investment.

It might reach the stage where you fall in love and refuse to sell it, no matter how good the price.


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