What You Need to Know About Alternative Investments
  • The nature of alternative investments
  • Incorporating alternative investments into a portfolio
  • How Cabot Lodge helps clients learn about alternative investments

Historically, alternative investments were generally available only to a limited number of investors, such as institutional investors, foundations and endowments.

Over the past several years, many progressive investment managers have fought to break down some of these barriers and make alternative investments accessible to retail investors. As a result, the alternative investment industry has experienced explosive growth.

The basics

The term "alternative investments" refers to a wide range of investments. They are usually not listed on any exchange.

Attractive features associated with many alternative investments may include:
  • Historical outperformance over traditional investment products
  • Low correlation with traditional investment markets
  • Protection of wealth by smoothing market volatility
  • Enhanced portfolio diversification
  • Potential for higher returns over time

Some drawbacks associated with alternative investments may include:
  • Higher investment minimums
  • Less liquidity than traditional investments
  • Longer subscription purchase process
  • Limited transparency
  • Limited performance history
  • Subject to less regulation than traditional investments
  • Riskier than traditional investment strategies

Incorporating alternative investments

Alternative investments should be part of an overall investment strategy for certain investors, based on their suitability profile

While everyone is unique, we have found that most clients have short-term or immediate needs (less than two years). They also have intermediate term goals that may be realized in five to seven years time. Also while having long-term wealth building goals, which alternative investments may help address.

Different investment products are best utilized for needs and goals with different time frames
For example:
  • Short-term needs are generally addressed with liquid, stable investments such as CD's, money market accounts, and short-term bonds.
  • Intermediate needs can be met with traditional investments or instruments such as equities, fixed income (bonds), and mutual funds.
  • Long term goals, which by definition have the longest time horizon, are generally attained with investments in growth oriented vehicles such as equities and alternative investments.

You're not alone

Alternative investments can be more complex than "traditional" investments. Don't let that deter you. A Cabot Lodge Advisor can help you determine if alternative investments strategies might be right for you, and if so, what role they might play in your overall portfolio, what percentage of assets should be dedicated to them, and which asset classes and sub-classes are most suitable for your needs. These may include:

  • Single manager funds
  • Funds of funds
  • Oil and gas
  • REITs
  • Private Placements (for qualified investors)

Our due diligence and investment selection process focuses on selecting alternative investments which we believe to be best-in-class products.

At Cabot Lodge, we specialize in alternative investments, always striving to identify investments which can meet our clients' needs and designed to achieve their goals.
Clients count on their Cabot Lodge Advisor to:

  • Continually monitor progress towards goals
  • Communicate and meet regularly to review portfolio performance
  • Discuss current market conditions and their impact on your portfolio
  • Make themselves available at any time to answer questions and address client concerns

To discuss your unique needs and goals, please call Cabot Lodge Securities at 1.888.992.2268 or visit our contact page

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