The use of illiquid investment vehicles can enhance diversification and help reduce correlation to market volatility. Historically these types of investments were only available to the wealthy and required seven figure minimum investments. Over the past decade, we’ve noticed investments in real assets and private equity have become increasingly more available to the retail investor.
These investments are broadly referred to as “Alternative Investments” in the same way that stocks, bonds and mutual funds are broadly referred to as “The Market” . Investing successfully in either category requires specialized knowledge, skilled analysis, diverse selections and deep due diligence.
If you are interested in real estate investing, some of these investments can provide a more diverse and indirect solution.
At Thornwood Financial, we know and understand the intricacies of alternative investments and help our clients construct a portfolio that complements their current investment portfolio holdings. As the portfolio managers at Ivy League University Endowments such as Harvard and Yale understand, increased diversification across non-correlated asset classes may provide increased downside protection against the volatility of the equity and fixed income markets. Our team will work with you to create your individual Endowment Model Portfolio to further diversify your investments.
Our alternative and direct real estate investment portfolios are constructed using a tailored process. Unlike many advisors in the large financial firms, our independence allows us to conduct on-site due diligence and get to know the investment companies on our alternative investment platform at a very deep level.
We visit their offices, meet with executive management, see their real estate investments in the field, listen to their conference calls and read their public and private filings. This approach allows us to really get to know these businesses and provide you with direct access to alternative investment opportunities.
Some examples of alternative investments we have worked with in the past are:
This approach brings a deeper level of diversification to your portfolio and allows you to invest in a manner more aligned with a large endowment or pension fund, for example. We believe this helps mitigate portfolio volatility and helps increase the probability of tax efficient potential cash flow from core businesses in our economy.
Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested.
There are material risks associated with investing in real estate securities including illiquidity, general market conditions, interest rate risks, financing risks, potential adverse tax consequences, general economic risks, development risks, and potential loss of the entire investment principal.
Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.
Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss.
Check the background of these investment professionals on FINRA’s BrokerCheck.
IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax concepts, therefore you should consult your legal or tax professional regarding the specifics of your particular situation.
Investments in securities are not suitable for all investors. Investments in any security may involve a high degree of risk and should only be considered by investors who can withstand the loss of their investment. Prospective investors should perform their own due diligence carefully and review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular before considering any investment. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA / SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA). Thornwood Financial is independent of CIS, CAM and CIA. To access Concorde’s Form Customer Relationship Summary (CRS), please click here.
This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every advisor listed. For additional information, please contact Laura Jocius at [email protected].
This is for informational purposes only, does not constitute as investment advice, and is not legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.
bd-eh-gp-a-1725-12-2023
