Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Alts
Old 10-28-2012, 04:43 AM   #1
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 928
Alts

Anyone been using "alternative investments" in their asset allocation?
http://www.investmentnews.com/articl...FREE/121019950
__________________

__________________
gcgang is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-28-2012, 04:46 AM   #2
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
No, sorry.
__________________

__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 10-28-2012, 08:14 AM   #3
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Your link requires registration at the site, GC--maybe you can quote a paragraph from it to explain what this term means?

Here is a recent discussion here that may touch on what you are asking about: Alternative Income Producing Assets.

I am sure if there is an investment option out there, someone here has tried it, and even surer that some people here will have an opinion about it!
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 10-28-2012, 11:59 AM   #4
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 928
Sorry about the link.
Exploring Alternatives: Practical Approaches for Building Better Portfolios
Alternatives are defined as an asset class or strategy that performs differently than stocks and bonds.
The objective in using alternatives is to lower portfolio risk.
One reason use of alts has increased is the " return-less risk" bonds and cash now offer.
Although Morningstar has tried to offer analysis of mutual funds in the alt space, it's hard to put in a box, things that are outside of the box.
__________________
gcgang is offline   Reply With Quote
Old 10-28-2012, 12:22 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,863
Most of the strategies I've seen, just through Morningstar and WSJ, are more bond like, lower expected return than equities but also lower volatility. They might make an interesting bond replacement, but I'm normally all equities so the common alternative investments haven't appealed to me.
__________________
Animorph is offline   Reply With Quote
Old 10-28-2012, 01:54 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Overall, the best alternate investment is likely cash. Government and wall street want us to be reaching, taking on more and more risk, because we seem to have no choice.

But there is always the choice to wait it out. I started investing seriously in 1973, and I have yet to see a time when something worthy did not present itself in a 3 year or so window. Some opportunites were better than others, but always something fairly low risk with decent reward possibilities came along.

There is a misconception that we must "put our money to work". The reality is that we must put our brains to work, and be sure we have funds available to back our good ideas when they do come along.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 10-28-2012, 03:09 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
I will investigate this a little more since there may be something to this ( and by that I don't mean anything positive). The article was extremely general and after reading it still did not have a clue what they were talking about exactly -- there were no specifics mentioned. Nevertheless, this single sentence was convinced me to investigate further:

Quote:
The biggest barrier to alternative investments appears to be the complexity of the products, with 48% of the respondents saying they have little understanding of alternatives, and 69% saying they will only invest in products that they understand fully.
Anything that the crowd is saying bad things about requires my attention... I'll probably want in just on general principles.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is offline   Reply With Quote
Old 10-28-2012, 10:27 PM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by RonBoyd View Post
I will investigate this a little more since there may be something to this ( and by that I don't mean anything positive).
In general, Larry Swedroe's book on the subject ("The Only Guide to Alternative Investments You'll Ever Need: The Good, the Flawed, the Bad, and the Ugly", http://www.amazon.com/Only-Guide-Alt...oe+alternative) will affirm your instinct to run away screaming. It's been out for a few years and I bet library copies are everywhere.

I think there were one or two asset classes that didn't actually suck money out of your portfolio. In most cases the best you could hope for was zero after-tax after-inflation returns with reduced overall portfolio volatility and (once every decade or so) a brief period of outsize gains.

One read was enough to immunize me.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-28-2012, 10:44 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by Nords View Post
In general, Larry Swedroe's book on the subject ("The Only Guide to Alternative Investments You'll Ever Need: The Good, the Flawed, the Bad, and the Ugly", http://www.amazon.com/Only-Guide-Alt...oe+alternative) will affirm your instinct to run away screaming... One read was enough to immunize me.
Thank you. I get to save time and money. That rarely happens to me except by accident.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is offline   Reply With Quote
Old 10-29-2012, 12:44 AM   #10
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 928
Thanks for the book, Nord.
I've tried to build a diversified portfolio, and have used gold, developing market short term bond/currency mutual funds, resources and real estate in my " alt" bucket.
I sometimes think of "global allocation" mutual funds, such as MALOX, IVWAX, PAUPX and even WASAX as alts, although I think they are just more flexible versions of balanced funds, and are still pretty strongly correlated with stocks and bonds.
Just trying to find ways of taking the roller coaster of 100% stock, and the negative real returns of cash and bonds, out of my future income streams.
I'll be interested in what Swedroe has to say.
__________________
gcgang is offline   Reply With Quote
Old 10-29-2012, 01:34 AM   #11
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by gcgang View Post
Just trying to find ways of taking the roller coaster of 100% stock, and the negative real returns of cash and bonds, out of my future income streams.
I'll be interested in what Swedroe has to say.
As legendary investor UncleMick has advised on this board many times:
"Psssst-- Wellesley. Heh heh heh."
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-29-2012, 07:05 AM   #12
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
ok. From this definition, I have been using alternatives. As discussed in other threads, I have most of my savings in CDs, munis, and this year I have begun to buy deferred annuities. I expect to learn more about funds and equities when I FIRE and use them, hopefully later this year. No time for this now.

Quote:
Originally Posted by gcgang View Post
Sorry about the link.
Exploring Alternatives: Practical Approaches for Building Better Portfolios
Alternatives are defined as an asset class or strategy that performs differently than stocks and bonds.
The objective in using alternatives is to lower portfolio risk.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 10-29-2012, 10:06 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,696
I also read Swedroe's book that Nords mentions above. It was an affirmation of my feelings not to stray very far from the standard stock/bond choices.

The closest thing we own to alternatives is Bill Gross's PTTRX Pimco Total Return. Not exactly way out. Here is an interesting link showing how the funds assets have varied over the years:http://investments.pimco.com/Marketi...t_PPC40052.pdf There is a decent helping of developed market non-US bonds plus investment grade in it.
__________________
Lsbcal is offline   Reply With Quote
Old 10-30-2012, 09:44 AM   #14
Thinks s/he gets paid by the post
Finance Dave's Avatar
 
Join Date: Mar 2007
Posts: 1,046
I think it's good advice not to invest in things you don't understand...so either avoid them or research them fully.
__________________
"Live every day as if it were your last, and one day you'll be right" - unknown
Finance Dave is offline   Reply With Quote
Old 10-30-2012, 09:52 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
To the extent you can find, understand, and like registered investments which are "alternative," be my guest. I happen to like (in small doses) MERFX and ARBFX as a diversifier, as an example. However, I strongly encourage one and all to stay away from anything which is not registered and on-shore. This means no hedge funds, venture capital funds, Venezuelan Beaver Cheese Futures funds, etc. Retail investors are way, way out of their depth in those vehicles and you would not even know you were making a bad choice until it was too late.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 09:40 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.