{"id":3138,"date":"2019-04-29T08:00:47","date_gmt":"2019-04-29T06:00:47","guid":{"rendered":"http:\/\/contattoblogs.timslatter.co.za\/?p=3138"},"modified":"2019-04-29T08:00:47","modified_gmt":"2019-04-29T06:00:47","slug":"your-starter-guide-to-alternative-investments","status":"publish","type":"post","link":"https:\/\/contattolive.co.za\/north\/your-starter-guide-to-alternative-investments\/","title":{"rendered":"Your starter guide to alternative investments"},"content":{"rendered":"<p style=\"text-align: justify;\">In the wake of very lacklustre JSE performance and plenty of uncertainty, many investors have started considering thinking\u2026 alternatively.<\/p>\n<p style=\"text-align: justify;\"><strong>In a nutshell<\/strong><\/p>\n<p style=\"text-align: justify;\">Alternative investments are different to the standard stock market approach; investing in assets outside the usual asset classes or in companies outside of the JSE-listed crowd.<\/p>\n<p style=\"text-align: justify;\">But can you invest alternatively? The first thing to note is that, like anything bespoke, alternative investing is far more expensive and less easily accessible than good ol\u2019 equities. However, if you have significantly more cash than the average Joe and the financial know-how these alternatives can easily outperform the normal market.<\/p>\n<p style=\"text-align: justify;\">Assuming you can, should you? Here, we break down some of the main and most popular alternative investment options:<\/p>\n<p style=\"text-align: justify;\"><strong>Hedge funds<\/strong><\/p>\n<p style=\"text-align: justify;\">Hedge funds are by far the most common and easily accessible of the alternative investing options. Due to this, they enjoy better regulation and options than other alternative asset classes. They are smaller, boutique funds often operating with much higher fees than traditional equities investing. But hedge funds routinely beat equities in the returns stakes, although not as handily of late.<\/p>\n<p style=\"text-align: justify;\">The phrase \u2018hedging your bets\u2019 explains what hedge funds do well \u2013 hedge funds have a unique ability to \u2018hedge\u2019 themselves so that the investors behind the hedge fund manager can do well whether a stock appreciates or depreciates.<\/p>\n<p style=\"text-align: justify;\">Hedge funds are essentially an exclusive pool of investors aggressively investing in a variety of opportunities not often available to the mainstream market. This can suit investors who have money to spare (the minimum investment requirement for most funds is high \u2013 sometimes R1 million just to get in the door) and want a long-term investment vehicle that\u2019s safer than the stock market that offers similar or higher returns.<\/p>\n<p style=\"text-align: justify;\"><strong>Venture capital and private equity<\/strong><\/p>\n<p style=\"text-align: justify;\">Usually only available to private equity of venture capital funds themselves, this is long-term investment in promising businesses near the beginning of their lifespan, with a view to share in their success later down the road when the company is turning a profit.<\/p>\n<p style=\"text-align: justify;\">Venture capital investing, specifically \u2018seed round\u2019 investing during which the company invested in is very young, is typically a long relationship with the funder in an advisory role to the business and an aid in growth.<\/p>\n<p style=\"text-align: justify;\">Private equity, although often grouped with and sometimes mistaken for venture capital, is different. Private equity often buys out these companies wholly or in part and so is the primary decision-maker, rather than the advisor.<\/p>\n<p style=\"text-align: justify;\">This is attractive because private equity traditionally outperforms equity. Options here are limited to those with a private equity fund registered with SAVCA.<\/p>\n<p style=\"text-align: justify;\"><strong>Socio-economic investments<\/strong><\/p>\n<p style=\"text-align: justify;\">Even more rewarding than the idea of private equity can be socio-economic investing \u2013 which is putting in finance and sharing in the returns later, not in a company, but in the country. So-called \u2018impact investing\u2019, these investment alternatives address issues in society like infrastructure, education for lower classes, renewable energy innovation and the creation of low-cost houses, to name a few examples. Few funds offer such options as it\u2019s still a relatively new concept for SA, but it\u2019s a great vehicle for those who can access it and are looking to improve and contribute meaningfully to the world while making returns on their money at the same time.<\/p>\n<p style=\"text-align: justify;\">It\u2019s important to remember that alternative investing is generally more difficult, exclusive, expensive and time-consuming than the well-oiled default of listed stock market options or old-favourite vehicles like unit trusts. They\u2019re also newer here in south Africa, with less variety and regulation for now because there is simply less demand. But if you\u2019re something of a pioneer and you want something very long-term, it may be worth a try. Just be sure to talk to your financial advisor and consult your personal financial plan before making any sudden movements.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\t\t\t\tIn the wake of very lacklustre JSE performance and plenty of uncertainty, many investors have started considering thinking\u2026 alternatively.In a nutshellAlternative investments are different to the standard stock market approach; investing in assets outside the usual asset classes or in companies outside of the JSE-listed crowd.\t\t<\/p>\n","protected":false},"author":1,"featured_media":3139,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,26,27],"tags":[],"class_list":["post-3138","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-life","category-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Your starter guide to alternative investments - 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