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Investing in stocks and bonds adds to your investment portfolio. But, digital disruptions have introduced several unique alternative investments worth considering. When the market’s performance is unclear, diversifying your investment sources makes sense.
Alternative investments In India are reaching out to significant numbers of people. This allows technology-based wealth creation. Alternative investments are enhancing established investing models with a creative and disruptive approach. Hence, this enables continual wealth development.
What Is Alternative Investment?
Alternative investments include any asset that is not a stock, bond, fixed deposit, or cash. Commercial real estate, start-up equity, P2P lending, and cryptocurrencies are alternative investments. These investments have less connection to the stock market. They provide unique investment options as well as better rewards.
Why Should You Consider Alternative Investments?
- One of the primary motivations for investing in alternative assets is to diversify. This is attractive for investors wanting long-term financial goals while decreasing risk. When you incorporate alternative investments in your portfolio, you are incorporating an asset class or investment strategy that frequently differs from stocks and bonds, especially under volatile market situations.
- Alternative investments can also boost portfolio performance. Because of their unconventional models, certain alternative assets may appear difficult. Understanding these models can assist you in identifying the possibility for returns that are comparable to their source models.
- For example, investing in commercial real estate through fractional investment would yield good returns that are maybe better and more predictable than investing in this market traditionally.
- Alternative investments provide downside protection. If you are only long stocks and the market falls, your portfolio will fall with it. If you hold tech stocks, you’ll lose a multiple of that since tech stocks have higher beta—a measure of a stock’s volatility. Many hedge funds safeguard investors in low markets because they are both long and short equities. That is, there are times when the market is down significantly yet hedge funds are up. Even now, in a challenging year for the general market, certain hedge funds are generating positive returns and huge outperformance.
- Alternative investment assets are less susceptible to broad market movements. They are more impacted by each investment’s underlying strength. For example, REITs are extremely popular among investors due to their long-term, passive nature and near-zero connection to market conditions – their income flows are purely sourced by the occupancy rate of the underlying properties.
| Alternative investments yield larger returns than standard equities and bonds. Over the last five years, private equity returned 22% while venture capital returned 25.8%. Compare this to the 17.6% return on equity during the same time period.~ Cambridge Associates |
What is the future of Alternative Investments?
Following the pandemic, wealth management has been reinvented. Following current macroeconomic changes, revamped dynamics of key asset classes are offering additional investing options for regular investors.
A modern-day investor is well-read and will analyze the numerous advantages provided by AIs. As a result, the approaching decade will present numerous inviting chances for all investors through alternative investments.
| Real Estate & Mortgages, Indian commercial real estate is expected to increase at a CAGR of about 13 percent.~ Square Yards |
Where Can I Find Alternative Investments?
Investing in alternative investments used to be difficult since these assets sometimes needed a large minimum commitment as well as specialized knowledge. However, there are several alternative investment platforms accessible today that make it simpler to participate in alternative investment assets.
Assetmonk, a multi-asset alternative investment platform that allows you to access various alternative investment options at the same time, is one such platform. It’s an excellent approach to broaden your portfolio’s diversification beyond standard assets.
Investments in alternative investment platforms like Assetmonk are carefully planned to include a diverse spectrum of investors and ticket sizes. These alternate investments like fixed-income investments structured debts are a wonderful way to earn and accumulate cash. Visit Assetmonk to invest in alternative investment assets with appealing risk-adjusted returns.
Related Articles
- The Benefits of Investing in Alternative Assets for Indian Investors.
- Types of Alternative Investments in India: Exploring Your Options.
- How to Evaluate Alternative Investment Opportunities in India.
FAQs
Q1. What is the meaning of alternative investment?
A. Alternative investments include any asset class that is not a stock, bond, fixed deposit, or cash. Commercial property (real estate), start-up equity, P2P lending, asset leasing, corporate bonds inventory finance, corporate bonds, hedge funds, commodities, art, wine, and cryptocurrencies are examples of alternative investments. These investments frequently have less connection to the stock market and provide unique investment options as well as better rewards.
Q2. Why choose alternative investments?
A. Alternatives depend less on broad market trends and more on the quality of every single investment; hence, adding alternatives has the ability to lessen a portfolio’s total risk.
Q3. What is the projected growth of alternative investments?
A. In five years, the worldwide market for alternative investments will be worth $18.3 trillion, up from $9.3 trillion at the start of 2023.
Q4. What is the demand for alternative investments?
A. Demand for alternative investment is anticipated to surge to $17.2 trillion by 2025.
Q5. Which are the best companies for Alternative Investment funds in India?
A. The best companies for alternative investment funds in India are ICICI Prudential AMC and Motilal Oswal.
