This post is sponsored by Hedonova. All thoughts and opinions are my own.
Don’t put all your eggs in one basket.
This one line not only explains diversification in investing but also emphasizes its importance.
While some may prefer the traditional 401(k) for their investments, others might like to have a brokerage account or to buy and sell stocks/ETFs. In fact, most investors would have a mix of both in their portfolios.
But there’s another asset class that investors can use to further diversify and strengthen their portfolios. Alternative assets.
In this post, we’ll answer the following questions for you –
- What are alternative assets?
- Why should you invest in alternative assets
- How to start investing in alternative assets
What Are Alternative Assets?
Stocks, bonds and cash are considered to be conventional or traditional assets. Pick up a random investment portfolio and you are likely to find one or all of them in it.
But there lies an ocean of investment assets beyond these. All of them are collectively called alternative assets.
Some examples of alternative investments are startups, real estate, cryptocurrencies, NFTs, artwork, wine, P2P lending and litigation funding.
Alternative investments are not new. In fact, HNIs (high net worth individuals) and institutional investors have had exclusive access to it for many years.
The exclusivity is a result of two factors. First, buying an alternative asset like artwork is capital intensive. You need a few thousand thousand dollars to buy a good artwork. Second, the markets for alternative assets are not as well-regulated as, say, the stock market.
But now there is a simple and more accessible way to invest in alternative assets. We will look at it in the section after the next. So keep reading!
Why Should You Invest in Alternative Assets?
HNIs and institutional investors have been investing in alternative assets for a long time now. So that should give investors who are exploring alternative assets for the first time some confidence.
There are two practical reasons why investing in alternative assets makes sense.
1. Great Performance
Alternative assets like artwork, bitcoin, real estate have comfortably beaten the returns generated by a stock market index like S&P 500 in recent years.
Of course, the extra returns don’t come for free in most cases. They can be significantly more volatile than the volatility experienced by stocks in a mature stock market.
Hence, it is recommended to not invest exclusively in alternative assets. This brings us to the second reason why you should invest in alternative assets.
2. Portfolio Diversification
Diversification is the most important aspect of any investment portfolio.
A portfolio made of a single stock or a single asset will be extremely volatile and may even end up generating dismal returns.
A well-diversified portfolio has all the important asset classes like stocks, bonds and cash. But a great way to further diversify and strengthen a portfolio of only traditional assets is by including alternative assets.
A portfolio that has both traditional and alternative assets can weather economic and market downturns better than a portfolio of only traditional assets.
How to Start Investing in Alternative Assets?
As we saw earlier, investing in alternative assets has been possible only for wealthy and institutional investors. But not anymore!
Hedonova is on a mission to democratize alternative investments for investors all over the world. They accept investments as low as $1000 to give you exposure to a portfolio of well-diversified alternative assets.
Think of Hedonova as an actively managed mutual fund of alternative assets. It is managed by a professional investment team that actively looks for great opportunities in the world of alternative assets.
The professional team at Hedonova has decades of experience in the traditional and alternative asset management industry.
Despite technically being a hedge fund, they have the many great features that are seen in the friendlier structure of mutual funds.
Liquidity is one of them. You can invest in and redeem from the fund any time without implications.
It is open for all investors too. No matter where you are in the world right now, you can invest in alternative assets through Hedonova.
Finally, the taxation is super simple even for international investors. You simply have to pay capital gains tax in your home country as per the tax laws applicable.
Invest in alternative Assets with Hedonova
Investing with Hedonova is really easy and online.
All you have to do is leave your contact details on their website. Or you can reach out to them via WhatsApp as well.
An investment expert will walk you through the investment process. If you are satisfied and want to invest, the expert will also help you get started by helping you complete all the formalities.
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