5 Alternative Investment Approaches

What are alternative investments?
An alternative investment is a category of investment that is not covered by any government regulator like RBI, SEBI, IRDA, and PFRDA. It refers to a privately funded investment fund – a trust or a company.

Here are some alternative investment strategies that can influence your investment decision-

Focus on the # 1 perfect return
You invest more money than you started with. This means that you are looking for an absolute return: how much you have actually done, that is the main focus.

Invest in assets that you believe will be good; Do not invest in any product as it may outperform the market. Have your analysis in hand.

# 2 Return one-dimensional, risk multidimensional
When it comes to investing, returns are easy to calculate. Also keep your focus on the risks involved with alternative investment assets. Prepare a list of relevant risks. You just have to be more discriminating with the help you render toward other people.

Also, if something unexpected happens, you can make better decisions if you think about the risks before investing.

# 3 Know the source return
Understand what will impact and drive a return on your investment. When you hold an investment, monitor the value of your investment.

Regularly review your estimates of investment return drivers, if they do not match your parameters or expectations reconsider your investment.

# 4 vaguely good
Some alternatives that are not traditional. An alternative investment is popularized by investment ideas that may not be immediately obvious. Such as cryptocurrency.

Continuing to learn, explore, research, study, and look beyond your comfort zone is the key to financial success.

# 5 Diversity is a must
Holding a mix of assets that are equally good, but which behave differently, will keep your portfolio returns intact and reduce the risk.

Diversify means creating a portfolio with very diverse return drivers and risk parameters, not just different assets.

Many of us find investing in alternative investments extremely risky. However, if you want to have a successful and fulfilling life and retire with enough money to enjoy your leisure years, you must take the risk of calculation. This includes your relationship risk, your career risk and your investment risk.

While smart calculations are vital to taking risks to reach your life goals, keep in mind that taking bad risks and losing can push you back, sometimes significantly. But it can also help to remember that taking smart risks is as easy as making wise decisions.

A framework for making good decisions

I have learned a lot in my life from observing others and from my personal experience – both good and bad. Therefore, when I consider taking risks in any area of ​​my life, here are the questions I ask myself:
1. What are the risks? Be honest. Your emotions do not prevent you from carefully considering all possible risks. This is where the landmine is.
2. What is the probability that a risk is true? Be truthful. Use real data whenever you can by researching and talking to others.
3. What is a reward? Be realistic. Can you really quit your day job and do something ten hours a week and earn $ 100,000 a year? (Probably not.)
4. What are the differences of this award? Be prudent. Find out how many others have done the same thing and how they got through.
5. Do I have any other options? Be creative. Don’t limit yourself. Consider all the possibilities.
6. Do I have to make this decision today? Probably not. Take the time you need to do your research and explore your options.

After you finish answering these six questions, remove the emotions from your decision and ask what your gut is telling you. Also, don’t forget about wild card risks; You don’t know what you don’t know!

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