Financial alternative: advantages and disadvantages of investing in gold, wine and oil

Posted by John Smith on January 20th, 2020

For someone unconventional, who leads an alternative business, traditional investment options are not the only possibilities. 

It all depends on the reasons that lead the investor to bet on that financial alternative investment. Although what is clear is that very few brokers would recommend this route as the first option.

What is clear is that this type of investment has a great attraction. Jewelry, real estate wines - It is not the conventional way of investing, it is something more complex than can be related, among others, to:

- Real estate.
- Private capital.
- Raw Materials.
- Hedge funds.

The common characteristics of this type of initiatives are:

- We need to make a high minimum investment.
- The complexity of the nature of the investment due to applicable special regulations.
- Difficulty locating potential investors.
- Lack of opportunities to publish performance data for verification.
- Low liquidity of assets.

 The main drawbacks of the financial alternative:

Not only do they involve risk, only suitable for those who are already experienced in investment practices and have other assets. But also, the private equity alternative investments imply some inconveniences that must be taken into account, such as:

Another benefit to taking into account the alternative investment is the protection it offers against inflation, something that other forms of investment cannot fight.

And, yes, it is true that these alternative assets may have high initial investment commissions. But it should not be forgotten that the associated transaction costs are typically lower compared to conventional assets. It is due to lower billing levels, which may result in tax benefits when they are raised for terms longer than one year.