Alternative Investments

 

 

 

 

Alternative Investments are the financial assets that do not fall into one of the conventional investment categories, like stocks, bonds, or cash. Alternative investments include commodities, properties, private equity, venture capital, distressed securities, hedge funds, exchange funds, or financial derivatives.

Nothing matters more than perspective

Everyone is watching a different movie. Personal financial success is all relative measured against the amount of effort you put into it and the expectations you set for yourself. Both are different for everyone. What seems trivial to you might be the most important thing in the world to us, especially if we’re at different stages in life – low-interest rates are great for young borrowers, but disastrous for retirees, who need fixed income. We’re all coming from a different place with different perspectives, which explains why so many equally smart people in finance and economics disagree with each other. When you find something crazy in finance and ask yourself “Why is this happening?” the answer is usually “because someone with a different perspective thinks it should.” Perspective also lets you realize that everyone, including you, can adapt to the initial pleasure of having more money.

          Need a piece of advice?

          On Earning: Never depend on a single income. Make investment to create a second source.
          On Spending: If you buy things you do not need, soon you will have to sell things you need.
          On Savings: Do not save what is left after spending, but spend what is left after saving.
          On Taking Risk: Never test the depth of the river with both feet.
          On Investment: Do not pull all eggs in one basket.
          On Expectations: Honesty is a very expensive gift. Do not expect it from cheap people.

          Warren Buffet

Don’t be under the illusion that this difficult market environment will go away quickly. Our advice is to have a diversified portfolio. You have to have some equities, some bonds, real estate, and precious metals. In our view, it will not end well. This era of artificially low and market-distorting interest rate structure will end terribly. There is a popular notion now of ‘sell everything’ but this is a flawed idea. You sell everything and you have all this money now, what will you do? Deposit it in banks? What happens when the bank goes bankrupt? In practice, it is very dangerous to have all your money with one bank.

Investments are an act of faith and a leap into the unknown where trust acts as a sort of ultima ratio in risk-adjusted profit assessments.

 

Publications

01/05/2018 Investment Banking Free of Charge 
07/19/2017 Is Finance (really) a Noble Profession? 
03/12/2016 The emerging markets. Where to go next?

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