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Alternative Investments

An alternative investment is an investment product which is not one of the three traditional investment vehicle/asset types: stocks, bonds or cash. The term includes investments in assets such as art, antiques, coins or investments in more sophisticated products that will return either a cash flow, appreciate in value or both. Alternative investments are a mainstay of financial and investment firms.



Opportunity and Risk

Alternative investments are used as a tool to reduce overall investment risk through portfolio diversification. They serve as a hedge against inflation, recessionary environments and losses/devaluation in traditional investments such as stocks and bonds. They also serve as an important financial planning tool to meet your monetary goals such as additional monthly income, college funds or an increased retirement nest egg. Accordingly, they should be a part of everyone’s portfolio. Let’s identify 3 steps you should consider when looking at alternative investments.



Steps to Evaluate Alternative Investments

  • You must define the risks associated with the investment you are pursuing.
  • You must properly estimate the reward.
  • You must weigh the risk of the investment against the reward.


    • Private Placement Memorandum

    There are many ways to invest in alternative investments. One of the more popular vehicles is an instrument commonly referred to as either a Private Placement Memorandum or a Regulation D Offering. A Regulation D offering is a government program created under the Securities Act of 1933 that allows companies the ability to raise capital though the sale of equity or debt securities. It provides the appropriate framework and documents for doing so properly.

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