Financial alternative: advantages and disadvantages of investing in gold, wine and oil


Posted January 20, 2020 by glainmax55

An alternative investment then is simply a vehicle for investment that offers an alternative way to make a profit from your assets.

 
For someone unconventional, who leads an alternative business, traditional investment options are not the only possibilities.

It all depends on the reasons that lead the investor to bet on that financial alternative investment. Although what is clear is that very few brokers would recommend this route as the first option.

What is clear is that this type of investment has a great attraction. Jewelry, real estate wines - It is not the conventional way of investing, it is something more complex than can be related, among others, to:

- Real estate.
- Private capital.
- Raw Materials.
- Hedge funds.

The common characteristics of this type of initiatives are:

- We need to make a high minimum investment.
- The complexity of the nature of the investment due to applicable special regulations.
- Difficulty locating potential investors.
- Lack of opportunities to publish performance data for verification.
- Low liquidity of assets.

The main drawbacks of the financial alternative:

Not only do they involve risk, only suitable for those who are already experienced in investment practices and have other assets. But also, the private equity alternative investments imply some inconveniences that must be taken into account, such as:

Any movement in this plane will require the utmost caution to prevent being a victim of fraud. The alternative investment capital is by not submitting to the regulation that applies, for example, to bonds or shares. That leaves more exposed to those who bet on this type of investment who, if they do not take the due diligence could be at the mercy of scammers.

The exclusivity of these types of transactions makes each operation virtually unique. This peculiarity increases the difficulty of investors in assessing the suitability of an operation and its convenience.

However, despite the difficulties, there is still the public for these alternative best investments. People who add a new old coin to their collection, a work of art or an exclusive bottle of wine, investors who purchase pure gold or oil, do not take into account the complexity of the process. But rather value the reward that they report and put the view on its advantages, such as the diversification of the portfolio they allow.

Another benefit to taking into account the alternative investment is the protection it offers against inflation, something that other forms of investment cannot fight.

And, yes, it is true that these alternative assets may have high initial investment commissions. But it should not be forgotten that the associated transaction costs are typically lower compared to conventional assets. It is due to lower billing levels, which may result in tax benefits when they are raised for terms longer than one year.
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Last Updated January 20, 2020