When it comes to investing, there are a lot of options to choose from. You can invest in stocks, bonds, and mutual funds. But what if those options aren’t complex or interesting enough for you? What if you’re looking for something more “outside the box?” If that’s the case, then you might want to consider investing in alternative or complex products. But before you do, Bill Schantz recommends gaining an understanding of the pros and cons of these types of investments. So read on to learn more!
Alternative Investment
One of the most popular questions we get asked is, “What are alternative investments?” Alternative investments are a broad category of investment vehicles that encompass any asset class other than traditional stocks, bonds, and cash. This can include real estate, private equity, hedge funds, venture capital, and more.
While alternative investments have been around for centuries, says Bill Schantz, they have only gained mainstream attention in recent years. This is due in part to the 2008 financial crisis, which left many investors searching for new ways to diversify their portfolios and generate returns.
Today, alternative investments are more popular than ever before. In fact, according to a recent survey by Preqin, nearly 60% of institutional investors now allocate some portion of their portfolio to alternatives.
If you’re thinking about investing in alternatives, there are a few things you should keep in mind. First, alternative investments are often illiquid, which means they can be difficult to sell when you need to raise cash. Second, they tend to be more volatile than traditional investments, so it’s important to have a risk tolerance before investing. Finally, alternative investments are often only available to accredited investors, which means you’ll need to meet certain income and net worth requirements.
Pros and Cons Of Investing In Alternative and Complex Products
Investing in alternative and complex products can be a great way to diversify your investment portfolio. However, there are some pros and cons to consider before investing in these types of products.
One pro is that alternative and complex products can offer higher returns than traditional investments. This is because they often involve more risk, which can lead to higher rewards. Additionally, investing in alternative and complex products can help you diversify your portfolio, which can protect you from losses in other areas of your investment portfolio.
However, there are also some cons to investing in alternative and complex products. One con, as per Bill Schantz, is that these types of products can be more volatile than traditional investments. This means that they may experience more ups and downs, which can make it difficult to predict their performance. Additionally, alternative and complex products may be less liquid than traditional investments, which means that it may be difficult to sell them when you need the money.
The Concluding Thoughts
Ultimately, whether or not investing in alternative and complex products is right for you will depend on your individual investment goals and objectives. However, if you are willing to take on more risk, says Bill Schantz, these types of products can offer the potential for higher returns. Just be sure to do your research before investing and always consult with a financial advisor to ensure that these types of investments are right for you.