An alternative investment is an investment other than traditional investment products such as stocks, bonds or cash.
This broad definition makes it impossible to list all alternative strategies, but the most common alternative investments are in real estate, private equity and hedged or absolute return strategies.
A common theme to alternative investments is that they generally have modest correlation with traditional investments and provide diversification to investors’ portfolios.
Clearly, some alternative investments are riskier than others. While the entire field of alternative investing is sometimes incorrectly painted as “very risky” by professionals in more traditional investment circles, the spectrum of low-to-high risk alternative investments is indeed as broad as that for traditional investments.
At Westcourt Capital, as our credo indicates, it is our mandate to focus only on conservative alternative investments, leaving the more exotic forms of alternative investing to others. Without exception, when we recommend alternative investments, our clients will understand the nature of the investments, how they create distributable cash, how they can increase in value over time, and what risks are attached to them. When investors understand their investments, they have more confidence in the process and are always more satisfied over the long term.