Trending Alternative Investments for 2024
Introduction
In the ever-changing financial landscape, investors are increasingly looking for ways to diversify their portfolios beyond traditional assets like stocks and bonds. Alternative investments have emerged as a viable option, offering a range of opportunities to build wealth and mitigate risk. Here, we will explore the trending alternative investments for 2024, why they are gaining traction, and what you need to know before investing.
What Are Alternative Investments?
Alternative investments are financial assets that do not fit into conventional investment categories such as stocks, bonds, or cash. These investments often include private assets like private equity, private credit, infrastructure, and private real estate [4].
Why Invest in Alternative Investments?
Alternative investments offer several benefits:
Diversification: They have a low correlation with traditional assets, which can help stabilize your portfolio during market turmoil [2].
Potential for Higher Returns: Many alternative investments have the potential to deliver higher returns compared to traditional assets, although they often come with higher risks [1] [2] [4].
Hedging Against Inflation: Some alternative investments, such as gold and real estate, are known to perform well in inflationary environments [2] [5].
Key Considerations for 2024
Market Environment
The current macro environment is dynamic, with central banks tightening monetary policies to counter inflation. This has led to higher costs of capital and lower liquidity, affecting how investors position their portfolios. Investors need to be agile and consider the evolving dynamic between cyclical and structural inflationary forces [5].
Sustainability and ESG
Sustainable investments are gaining traction, with a focus on environmental, social, and governance (ESG) considerations. Integrating ESG factors into your investment strategy can help achieve positive change while generating favorable returns [5].
Risk Management
Alternative investments often come with unique risks. It is crucial to conduct thorough due diligence and mitigate operational risks across your portfolios. This includes assessing asset managers, custodians, and other service providers to ensure governance objectives are met [5].
Implementation and Fiduciary Management
When investing in alternative assets, it is important to define, develop, and implement a clear investment strategy. This involves addressing areas such as governance, risk, and diversification. Leveraging relationships with asset managers and using strategic research can help identify new investment opportunities and innovations across private markets and hedge funds [5].
Retail Opportunity
The retail market for alternative investments is growing, with Cerulli estimating a $1.4 trillion opportunity in advisor-intermediated illiquid alternative assets. This is expected to grow to $2.4 trillion in the next five years. Traditional managers are increasingly striking strategic partnerships to capitalize on this market opportunity [3].
Conclusion
Alternative investments offer a diverse range of opportunities for investors looking to expand their portfolios beyond traditional assets. From fine wine and gold to hedge funds and private equity, each option comes with its own set of benefits and risks. Understanding the current market environment, focusing on sustainability, and managing risk are key to making informed investment decisions in 2024.
Actionable Insights
Diversify Your Portfolio: Consider adding alternative investments to reduce your reliance on traditional assets.
Conduct Due Diligence: Thoroughly research and assess the risks associated with each alternative investment.
Stay Informed: Keep up with market trends and regulatory changes that could impact your investments.
Seek Professional Advice: Consult with financial advisors or investment managers to tailor your investment strategy to your needs.
By understanding the trending alternative investments for 2024 and the key considerations involved, you can make more informed decisions to grow your wealth and protect your portfolio in a changing financial landscape.
Meet
Eric Passin
Hi there! 👋🏼 I'm Eric, a financial advisor from Northern New Jersey with a creative approach to wealth management, influenced by my background in a family of artists and designers. I’m passionate about educating clients and empowering them to make informed financial decisions.
Citations:
[1] https://www.vinovest.co/blog/best-alternative-investments
[2] https://www.jpmorgan.com/insights/global-research/investing/alternative-investments
[3] https://www.cerulli.com/reports/us-alternative-investments-2024
[4] https://www.yieldstreet.com/top-alternative-investments-trends/
[6] https://www.wellington.com/en/insights/alternative-investment-outlook
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. It is important to note that federal tax laws under the Internal Revenue Code (IRC) of the United States are subject to change, therefore it is the responsibility of taxpayers to verify their taxation obligations.
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors.
Trending Alternative Investments for 2024
Introduction
In the ever-changing financial landscape, investors are increasingly looking for ways to diversify their portfolios beyond traditional assets like stocks and bonds. Alternative investments have emerged as a viable option, offering a range of opportunities to build wealth and mitigate risk. Here, we will explore the trending alternative investments for 2024, why they are gaining traction, and what you need to know before investing.
What Are Alternative Investments?
Alternative investments are financial assets that do not fit into conventional investment categories such as stocks, bonds, or cash. These investments often include private assets like private equity, private credit, infrastructure, and private real estate [4].
Why Invest in Alternative Investments?
Alternative investments offer several benefits:
Diversification: They have a low correlation with traditional assets, which can help stabilize your portfolio during market turmoil [2].
Potential for Higher Returns: Many alternative investments have the potential to deliver higher returns compared to traditional assets, although they often come with higher risks [1] [2] [4].
Hedging Against Inflation: Some alternative investments, such as gold and real estate, are known to perform well in inflationary environments [2] [5].
Key Considerations for 2024
Market Environment
The current macro environment is dynamic, with central banks tightening monetary policies to counter inflation. This has led to higher costs of capital and lower liquidity, affecting how investors position their portfolios. Investors need to be agile and consider the evolving dynamic between cyclical and structural inflationary forces [5].
Sustainability and ESG
Sustainable investments are gaining traction, with a focus on environmental, social, and governance (ESG) considerations. Integrating ESG factors into your investment strategy can help achieve positive change while generating favorable returns [5].
Risk Management
Alternative investments often come with unique risks. It is crucial to conduct thorough due diligence and mitigate operational risks across your portfolios. This includes assessing asset managers, custodians, and other service providers to ensure governance objectives are met [5].
Implementation and Fiduciary Management
When investing in alternative assets, it is important to define, develop, and implement a clear investment strategy. This involves addressing areas such as governance, risk, and diversification. Leveraging relationships with asset managers and using strategic research can help identify new investment opportunities and innovations across private markets and hedge funds [5].
Retail Opportunity
The retail market for alternative investments is growing, with Cerulli estimating a $1.4 trillion opportunity in advisor-intermediated illiquid alternative assets. This is expected to grow to $2.4 trillion in the next five years. Traditional managers are increasingly striking strategic partnerships to capitalize on this market opportunity [3].
Conclusion
Alternative investments offer a diverse range of opportunities for investors looking to expand their portfolios beyond traditional assets. From fine wine and gold to hedge funds and private equity, each option comes with its own set of benefits and risks. Understanding the current market environment, focusing on sustainability, and managing risk are key to making informed investment decisions in 2024.
Actionable Insights
Diversify Your Portfolio: Consider adding alternative investments to reduce your reliance on traditional assets.
Conduct Due Diligence: Thoroughly research and assess the risks associated with each alternative investment.
Stay Informed: Keep up with market trends and regulatory changes that could impact your investments.
Seek Professional Advice: Consult with financial advisors or investment managers to tailor your investment strategy to your needs.
By understanding the trending alternative investments for 2024 and the key considerations involved, you can make more informed decisions to grow your wealth and protect your portfolio in a changing financial landscape.
Meet
Eric Passin
Hi there! 👋🏼 I'm Eric, a financial advisor from Northern New Jersey with a creative approach to wealth management, influenced by my background in a family of artists and designers. I’m passionate about educating clients and empowering them to make informed financial decisions.
Citations:
[1] https://www.vinovest.co/blog/best-alternative-investments
[2] https://www.jpmorgan.com/insights/global-research/investing/alternative-investments
[3] https://www.cerulli.com/reports/us-alternative-investments-2024
[4] https://www.yieldstreet.com/top-alternative-investments-trends/
[6] https://www.wellington.com/en/insights/alternative-investment-outlook
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. It is important to note that federal tax laws under the Internal Revenue Code (IRC) of the United States are subject to change, therefore it is the responsibility of taxpayers to verify their taxation obligations.
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors.
