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Can Alternatives Preserve Principle and Earn Great Returns?

Posted on Posted in Alternative Investments

Whether you are a seasoned investor or building your first portfolio, your motivations are likely the same: preserve investment principle and earn steady returns. In my opinion, the only difference between new and experienced investors is their tolerance for risk. If you look closely, this hardiness (or lack there of) is often reflected in their strategy for investing. That said, with similar goals in mind, both groups of investors maintain a portfolio that affords an increasing amount of exposure to alternative investments. Some do this for higher returns, others choose them to reduce exposure to risk.

With what seems like never ending economic and political turmoil, the investment community is constantly reassessing the world’s markets and re-evaluating their holdings. In doing so, a growing number of investors are choosing to include alternative investment strategies to maintain/improve the performance of their portfolio. This approach has become much more of a common practice, since the international investment community was devastated by the global financial crisis in 2008. In the years following the crisis, investors have been cautious of stocks, bonds and real estate and chosen to to limit their portfolio’s exposure to those risky holdings. Instead of pursuing their traditional strategies in stock markets, etc., many are apprehensive and have made the decision to invest in nontraditional investment opportunities, to “play it safe.”

Among the alternatives rising in popularity are opportunities to invest in international trade. With an increasingly positive outlook on the shipping industry and the global economy, the appeal for many investors is the opportunity to profit from the world’s constant economic growth. This can be done by investing in port and infrastructure investments through an ETF, or by way of something as simple as investing in shipping containers with a maritime asset management company. The safe assumption seems to be that if there is a constant rise in economic growth around the world, investments tied to industries that facilitate the increase, like the Transportation and Manufacturing industries for example; should enjoy long-term prosperity as well.