What is an Alternative Investment?
The term “Alternative Investment” covers a wide range of investments, which lends itself to inaccurate generalizations that are often used to frame many good investments as being overly risky. This is unfortunate because it has caused many investors to miss out on asset classes that could provide needed diversification to stock-heavy portfolios. Not all Alternative Investments utilize sub-prime mortgage derivative arbitrage or other obscure techniques. Some simply lease rail cars to railroad companies, or purchase first-position, low-risk mortgage notes at a discount.
VWM is a big believer in using Alternative Investments to help reduce volatility and provide steady (some would say “boring”) returns that have very little correlation to more traditional assets. Some investments used by VWM are restricted by regulation to “accredited investors” only, meaning investors must have at least $1M of investable assets, but several others are available to most if not all investors. More details on Alternative Investments used by VWM for both accredited and non-accredited investors can be found by visiting their respective web pages below.