The benefit of a long-term investment portfolio could exist through alternative investments. The advantages are to enhance diversification and higher returns potential. Others like non-traditional sources of portfolio income as well as possible tax advantages are the positive side of alternative investment. Hereby kind of alternative investments with their brief description.
The first is private equity offerings. It is the form of Capital Stock issuance that is not under the Securities Act of 1933. The second is hedge fund offerings. Hedge fund offerings cover investment in equity securities, commodities, debt, real estate, derivatives as well as currencies. The third is real estate private placements. It is the form of opportunities you cannot find in public markets such as the stock exchange. The fourth is non-traded closed-end funds. Non-trade CEFs are the funds that are not in the exchange. They don’t have the requirements for specific levels or liquidity for investors.
The fifth is 1031 exchanges, real estate investing too allowing investors to swap out an investment property for capital gains. The sixth is exchange funds, a swap fund for an arrangement between concentrated shareholders of different companies polling shares. The seventh is non-traded business development companies. These companies invest in small and mid-sized companies but aren’t traded on an exchange.
The eight are non-traded real estate investment trusts (REITs). REITs are a method for real estate investment in order to reduce or minimize tax while gaining returns on real estate. The ninth is managed futures. Managed futures refer to a strategy for professional managers to diversify their portfolio of futures contracts. The last is commodity funds. Commodity invests in raw materials. In most cases, it invests in agricultural products like commodities. Other resources like precious metals and gold are also some of its categories.