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Alternative Investment Solutions: Building a Strong and Diverse Portfolio

February 1, 2024

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Alternative investments are reshaping the landscape of modern portfolio management. In a world where traditional investment avenues often fluctuate with market uncertainties, alternative assets offer a unique opportunity for diversification and stability. In this article, you will learn:

  • The significance of alternative investments in today’s financial climate.
  • Insights into Supervest’s 10% and 12% MCA investment notes.
  • Practical strategies for integrating alternative assets into a diverse portfolio.

Let’s uncover how alternative investments can fortify your financial future.

Alternative Investments’ Rising Popularity 

In recent years, alternative investments have become a cornerstone for investors who want to mitigate risks and enhance returns. 

Unlike traditional stocks and bonds, these assets more often move independently of the stock market, providing a cushion against market volatility. 

The latest Preqin Global Alternatives Report highlights a steady increase in global alternative assets, projecting a growth to $17.16 trillion by 2025

This surge reflects a growing recognition of their potential to deliver robust returns even in turbulent times.

Why Alternative Investments Matter

Alternative assets aren’t just a hedge against market fluctuations; they’re a proactive strategy for growth. 

Data from BlackRock shows that 59% of global insurers planned to increase their allocation to alternative investments. 

This trend isn’t confined to institutional investors; individual investors are also turning to alternatives as a means to achieve a more resilient portfolio.

Incorporating alternative assets into a conventional investment portfolio has the potential to moderate volatility and elevate the likelihood of better risk-adjusted returns.

An analysis conducted by J.P. Morgan revealed thar by reallocating a standard 60/40 portfolio to include 30% in alternative assets, alongside 40% in equities and 30% in fixed income, there was a significant impact on performance metrics. 

This strategic shift increased the annualized returns from 8.39% to 9.04%, while concurrently decreasing the volatility from 9.66% to 7.97% over the observed period.

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