Alternative and traditional investments: The real score

While Scott Tominaga of PartnersAdmin has discussed alternative and traditional investments several times before, he believes it is always a good idea for people to revisit the basics and refresh themselves on the subject matter. A review is still useful, especially for people who plan to invest soon.

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So, without further ado, here are some of the comparisons made between alternative and traditional investments.

Traditional: Traditional investments include bonds, stocks, and cash. They are known to be steadier, low-risk, and less-volatile compared to alternative investments. Traditional investments also take a longer time to yield profits. They require much lower investment capital and are also very liquid, which means investors can take them out whenever needed. The downside, though, is that traditional investments also go down when the market goes down, even to sometimes being negative.

Alternative: Hedge funds, managed futures, private enterprises, and real estate are some examples of alternative investments. Many people are discouraged by alternative investments because of the high capital requirements and the longer time it takes to liquidate these investments. However, alternative investments are much more profitable than traditional investments, especially during ideal conditions. But even when the market is down, alternative investments are affected a lot less than traditional investments.

Which type of investment are you inclined to invest in? Traditional or alternative investments? Feel free to share your thoughts with Scott Tominaga in the comments section below.

Scott Tominaga is the Chief Operating Officer of PartnersAdmin LLC, a company established to provide a quality, outsourced solution to meet the dynamic back-office needs of the alternative funds industry. Check out this blog for more articles on business and finance.