Home | "Maximize Decision Making with Alternative Investments"
Alternative investments have been gaining popularity in recent years as investors seek to diversify their portfolios and generate higher returns. Incorporating alternative investments in decision making can provide unique opportunities for investors to access asset classes beyond traditional stocks and bonds.
According to a recent study by Preqin, a leading data provider in the alternative assets industry, alternative investments reached a record $10.7 trillion in assets under management in 2020. This represents a significant increase from previous years, highlighting the growing interest in alternative investment strategies.
One of the key benefits of incorporating alternative investments in decision making is the potential for higher returns. Alternative assets such as private equity, hedge funds, real estate, and commodities have historically outperformed traditional investments over the long term.
Furthermore, alternative investments can provide diversification benefits by reducing correlation with traditional asset classes. This can help investors mitigate risk and improve the overall risk-adjusted returns of their portfolios.
| Asset Class | 2019 AUM ($ trillion) | 2020 AUM ($ trillion) |
|---|---|---|
| Private Equity | 3.4 | 3.9 |
| Hedge Funds | 3.3 | 3.6 |
| Real Estate | 1.1 | 1.3 |
| Commodities | 0.8 | 0.9 |
Source: Preqin
As investors continue to seek alternative sources of return in today's low-interest-rate environment, incorporating alternative investments in decision making has become increasingly important. By diversifying their portfolios with alternative assets, investors can potentially enhance returns and reduce risk.
Overall, alternative investments offer a compelling opportunity for investors to explore new avenues for growth and diversification. As the landscape of investing continues to evolve, incorporating alternative investments in decision making will be crucial for investors looking to stay ahead of the curve.