There’s a lot of buzz around alternative investing. You may have heard that alternative investments are simply out of reach for most individual investors. However, the times are changing within the financial landscape, and it’s time to start exploring new options and diversifying portfolios through simple, creative investing. But, who really needs alternative investing?
To answer this question, simply imagine a world where innovation happens constantly. Imagine a world where rocket scientists built space ships to send robots to Mars to beam back photos; a place where everyone on the planet was connected by magic machines in their pockets that allowed them to learn about anything they wanted. To share pictures. Stories. Instantly.
In this world, the digitization of information and acceleration of processing power creates such a level of complexity in the financial markets that an arms race broke out between who could trade one nano-second faster.
In such a world, it seems reasonable to expect that investing should be just as innovative. In this world, you might want to use tools better suited for the dynamic, rapidly changing environment. You might want to come up with new theories. Big ideas. Small ideas. Maybe even just different ideas: ones that could cure cancer, ensure countries could become more energy independent, or even restructure fuel prices around the world.
Now imagine that your only options to invest were basically stocks and bonds, and your only vehicles for capturing and expressing ideas were the financial equivalent of horses and buggies.
Although some investors were creating solutions tailored to the times by using technologies appropriate for the ideas of the day (think: funds full of startups, vehicles to accelerate oil exploration, and portfolios structured to express complex global realities) – all of these alternative investment solutions remained just out of reach. Even active managers were susceptible to failure, as this method of investing is surely a train on its way off the rails.
Alternative investing is all about approaching the challenge of investing with the same level of creativity that exists in the dynamically changing world we find ourselves in everyday. Alternative investing allows individual investors to explore creative opportunities with flexible strategies, where ideas dictate approaches. Not vice versa.