Exploring Alternative Investments: What to Look for When Selecting an Alternative Investment

The world of alternative investments is expanding rapidly, offering investors a plethora of options beyond traditional stocks and bonds. But with so many choices available, how do you know which alternative investment is right for you?

According to experts, there are four basic ways to invest in alternative assets:

1. Private syndication: Investing in small companies or individuals, but beware of the risks associated with this unregulated sector.
2. RIA only through an advisor: A newer channel for investors to access accredited alternative investments.
3. Broker-dealer through an advisor: The oldest channel, where many of the largest alternative investment companies started.
4. Direct investments: For those who can invest directly into underlying assets like distribution centers or private equity.

When considering alternative investments, it’s important to look for certain key factors:

1. Legal, ethical, moral, unfair advantage: Seek investments with a competitive edge and a strong ethical foundation.
2. Economies of scale: Look for opportunities where larger portfolios can create passive cash flow.
3. Access to off-market deals: Companies with better access to information or products often have a competitive advantage.
4. Track record in down cycles: Choose companies with a proven track record of navigating challenging market conditions.

Ultimately, these factors can help guide investors towards opportunities with the best potential for success and stability in the world of alternative investments. Whether you choose private syndication, RIA channels, broker-dealers, or direct investments, conducting thorough research and due diligence is key to making informed investment decisions.