Ten Reasons To Consider Investing In Alternative Assets

This brilliant article published by Forbes illustrates why alternative assets are the next big thing in the investing industry. 

Among the ten reasons listed as crucial points to increase portfolio allocations to alternative investments, are : HIGHER ABSOLUTE RETURNS

Alternative assets may also earn higher nominal returns than publicly traded stocks and bonds as the multiplier effects of lower valuations, higher growth and strategic liquidity events compound the effects of capital appreciation. 


 Alternatives are typically less correlated with the vicissitudes of the public capital markets with focus on quarterly performance and the impact of macroeconomic factors. 


Public equities and debentures tend to decline in value during periods of inflation because the associated future cash flows are discounted at a higher rate and therefore become less valuable.

Alternative assets may be better able to hedge against rising prices because their value is created from financial metrics and nonfinancial, strategic milestones. 


Certain alternative assets can generate a reliable income stream over time with a higher yield than dividends or interest payments. 


Alternative assets can reduce portfolio volatility through various exposures that each asset type has to market conditions.

The greater the exposure, the more protections a portfolio has when compared to limited holdings of traditional investments. 

“While alternative investing was primarily only an option for large, institutional investors during the past several decades, today’s new alternative funds and direct investment opportunities are increasingly available for individual investors and family offices.

As a result, new capital inflows are fueling exponential growth in the alternatives industry.”

Traditional x Alternative Investments

When we discuss traditional investments, we refer to those traded by financial institutions, such as banks and brokers

As they are linked to the financial economy, their variations are related to the market conditions in which they are inserted. 

The stock market is a perfect example: when the market is good, the stocks tend to appreciate.

Alternative investments, however, often do not have a standard platform for trading.

Therefore, they can happen through direct contributions or via investment funds.  Some of the main differences between alternative and traditional investments are? 

Relationship with the market: while traditional investments have a financial nature and depend on the market situation, alternatives do not have this correlation.

This means that they are not affected by economic issues. 

Liquidity: because they are not widely shared in the market and, consequently, less traded, alternative investments tend to have lower liquidity than traditional ones.

This is one of the main features at Arbtrust with 2-day liquidity. 

Participation: in the traditional market many shareholders are passive about their investments.

The opposite happens in the alternative options, where there is greater participation. 

For those interested in diversifying their portfolio and investing in alternative assets, there is a range of options to choose from.

What does the continuous raise on interest means?

We are all aware that Fed has been raising rates in order to try to contain inflation

But what does that mean: In sum, it means that the Fed is forcing an increase in the cost of credit throughout the economy.

Higher interest rates make loans more expensive for both businesses and consumers.

Therefore, everyone ends up spending more on interest payments.

However, the main goal of the increase on the rates is to fight inflation by lowering the amount of money available in the economy.

The vast majority of the population can’t or don’t want to afford the higher payments postpone projects that involve financing.

It simultaneously encourages people to save money to earn higher interest payments.

This reduces the supply of money in circulation, which tends to lower inflation and moderate economic activity—a.k.a. cool off the economy.

Private Equity x Hedge Funds

There are several differences between these two types of funds and their strategy. We listed some of the largest distinctions:

LIQUIDITY: Hedge funds can invest in public markets and alternative assets. This generally means they are much more liquid than investments made through private equity firms. 

WIN-WIN STRATEGY: Hedge funds may invest to profit either if that specific company or asset goes up and/or down.

In private equity or private debt, the goal is to generate value through the success of the underlying company.

Hedge funds, on the other hand, can generate profit from companies and assets that are underperforming the market and their industry.

NON-CORRELATED ASSETS: Hedge funds invest in relative performance.

Private equity, private debt, and mutual funds tend to generate their returns largely driven by a growing economy and supported by the market momentum.

Hedge funds, on the other hand, can generate returns regardless of the main market and economy movements.

These are just few of the factors that explain why hedge funds and private equity and debt behave in different ways.

This also means that each strategy might fulfill a separate and diversifying purposed in a well-structure investment portfolio.

Arbtrust LLC is a Company based in Florida. Any prospective investors that wish to subscribe units of the Abrtrust LLC operations should contact us through the contact form. This website is not an offer to buy or sell, nor is it a solicitation of an offer to buy or sell, the Units or any other security or to participate in any advisory services or trading strategy. Any offering or solicitation will be made only to certain qualified investors who are “accredited investors” as defined under Regulation D of the Securities Act, and any investments by U.S. persons will only be permitted to potential investors who demonstrate that status. Investors in the Shares must have the financial ability, sophistication, experience, and willingness to bear the risks of such investment.

Arbtrust Venture LLC (the “fund”) operates pursuant to SEC rule 506(b) of regulation D. The membership interests of the fund have not been registered under the securities act of 1933 (the “securities act”), or the securities laws of any state.  Abrtrust performs arbitrage in the negotiation of digital assets, the simultaneous buy and sell of a specific asset taking advantage of the fluctuation of the price of the same asset; and also invests in international private companies.

Historical returns, economic, market or other performance it is not an indication of future results. Potential investors must have the financial ability, sophistication, experience, and willingness to bear the risks of an investment.

Any potential investments made in the company involve risk. Potential investors should carefully consider the long term nature of an investment in the Units prior to making an investment decision.  Units of the company are not insured by the FDIC.