Financial Planning Month: Consider Diversifying with Alternative Investments | Millennium Trust Company

Financial Planning Month: Consider Diversifying with Alternative Investments

October 17, 2018
By Millennium Trust

Individuals are increasingly investing in alternative assets, and those levels are set to rise.

Why are investors moving towards alternative investments? Simply put, alternative investments can be powerful diversifiers in a portfolio. Despite the 10-year bull market we’ve been experiencing, it’s inevitable that the market will eventually turn. Investing in alternative assets can protect against market volatility – and in a self-directed IRA, can add the benefit of tax-deferred growth over time. During Financial Planning Month, consider exploring ways to diversify that can help meet long-term investment goals.

Types of Alternative Investments

  • Hedge Funds

  • Private Equity/Debt

  • Real Estate

  • Managed Futures

  • Precious Metals

  • Multi-strategy

Top 5 Reasons to Consider Alternative Investments

  • Alternative investments are part of a large and growing asset class. By 2025, global alternative investments are expected to reach upwards of 21.1 trillion dollars. This growth presents a potential opportunity for some investors. 
  • Self-directed IRAs can hold alternatives. Holding alternatives in a self-directed IRA provides tax benefits that allow for tax-deferred growth over time.

  • You may be able to use risk to your advantage. In any market environment, alternatives can be useful diversifiers since these assets typically have low correlation with other asset classes.

  • Alternative investments have matured and become more mainstream. While alternatives have long had a reputation for being risky, they constitute a diverse asset class with a broad range of attributes with varying degrees of risk.

  • Alternative investments are not as hard to access as they once were. New online investment platforms are making it easier for advisors and investors to access a variety of opportunities without the burden of complicated paperwork.

Click the button below to receive more information about alternative investment options, and be sure to check out the other blog posts in the Financial Planning Month series.

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The material in this blog is presented for informational purposes only. Millennium Trust Company performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.

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