Why invest in alternatives?

Part 2 of our “summer school” series on alternatives

As highlighted in my previous blog, What are alternative investments, I’m embracing the spirit of summer school with a series of four blogs reviewing the basics of alternative investments. Part 1 explained what alternative investments are. In this installment, I explore why an investor should consider investing in alternatives.

Why use alternatives?

Like stocks and bonds, alternative investments are simply tools used by investors in an effort to achieve their investment goals. Given their unique characteristics, alternative investments have the potential to help investors meet three key objectives:

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What are alternative investments?

Part 1 of our “summer school” series on alternatives

Most will agree that one of the least enjoyable summer traditions is summer school. I got a vivid reminder of this the other day when I put my youngest son on the bus for his summer classes, then had flashbacks to my own summer before 9th grade when I did the same thing. But while summer school is not particularly fun (at any age), it can be extremely valuable.

In my experience, summer school gave me a preview of material I needed to know for the upcoming year and allowed me to catch up on any previously covered material that was difficult to master. Regardless of the reason for our summer “sentence,” we all emerged from summer school smarter and better prepared for the upcoming year.

With this in mind, I thought I would use this summer to write a series of blogs covering the basics of alternative investments. My hope is the series will provide an opportunity for people to become more familiar and comfortable with this topic and be more informed investors as we head into the second half of 2017.

What are alternative investments?

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Private equity: What investors need to know

You won’t find these funds in your 401(k), but some in the industry want to change that. Find out why.

While private equity funds are currently off limits to retail investors, many large firms in the industry are seeking ways to include private equity exposure in 401(k) accounts and target date funds.1 Providing retail investors with private equity fund options would be a welcome development, in my view, potentially enhancing their ability to build effective portfolios for more secure retirements.

Institutional and high net worth investors have long been attracted to private equity for its potential to deliver returns above those of public equity markets. To understand why, let’s take a closer look at this asset class.

What is private equity?

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Alternative strategies: What have the past three years taught investors?

We highlight three key lessons learned, and one that may yet be in store

Davis_Walter_sm_150dpi_RGBWhen I joined Invesco in 2014 and started blogging about alternatives, alternative investment strategies were fairly new to individual investors; most of these mutual funds had track records of less than three years. At that time, many people didn’t know what to expect from this asset class, which gives investors exposure to a broad range of opportunities outside of traditional, long-only stock and bond holdings.1 Today, with the ability to look back over the past three years, there are three key lessons that investors can take away about alternative investment strategies:

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What may be in store for alternatives in 2017?

We highlight which strategies could possibly benefit from policy changes, rising rates and more

Davis_Walter_sm_150dpi_RGBAs we enter 2017, there is a long list of issues that could affect alternative investments: policy changes in the US, elections in Europe, rising rate expectations and more. Given this changing landscape, I would like to highlight some alternative investments that I believe have the potential to benefit investors in the new year. In doing so, I’ll be using Invesco’s Alternatives Framework (see below) to identify strategies for each of the five alternative buckets.

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