Alternative Investment Strategies Defined

The economy appears to be on the rebound following the financial crisis of the early 21st century. On December 23, 2014, according to the Wall Street Journal, the Dow Jones Industrial Average finished above 18,000. Although these record-breaking gains have benefited investors focusing on stocks and bonds, the ever-changing, herd nature of the stock market remains a volatile setting capable of decimating an investment portfolio within days, if not hours. However, alternative investment strategies allow your portfolio to partially escape the thrill-rides of the stock market.

Alternative Investment Strategies Definition

Alternative investment strategies refer to a portfolio that focuses on futures, private equity, real estate, currencies, distressed debt, and commodities rather than stocks and bonds blindly. In addition, there are several well-known alternative investment strategies that have garnered acclaim and a reputation for a high return on investment.

Diversified Indices

A yearly return on investment of 82.8% was seen over 6 years on investments in Diversified Indices, which includes the Russell 2000, Emini S&P 500, and the Emini S&P MidCap 400, Since the alternative investment strategy of diversified indices uses multiple liquid stocks and relies upon the profitability of each given index, the amount of any investment has the potential to bring in record profits even when the other indices fall rapidly

Commodity Futures

Another key aspect of alternative investment strategies involves the highly-lucrative, in-demand precious metals, such as gold, silver, or platinum, otherwise known as a Commodity Futures. By focusing on the reliable trends over the past 13.5 years, this alternative investment strategy enables investors retain their investments throughout market lulls while knowing that the price of the given precious metal will return to it previous highs.

Breakout Momentum

The entry of every new entity into the stock market represents the potential for a significant return; although, the investment carries a high-risk for failure. In order to protect against this risk, the Breakout Moment Alternative Investment Strategy uses indicators, such as the pattern of triangulation between the rise and fall of correlating stocks, to determine when a given stock will experience a breakout into the market with a large return. This strategy has worked effectively for more than a quarter of a century to identify key stocks, capable of bringing in a high return on investment.

On January 24, 2015, the Dow Jones Industrial Average dropped by more than 100 points within 6.5 hours. In order for an investment portfolio to provide the greatest security from the pitfalls of the stock market, it must contain a plethora of diversified investments, particularly those that utilize an alternative investment strategy. By understanding the alternative investment strategy definition and how it has been used to bring in a high return on investment, you will be able to spread investments without the fear and inconsistency of high-risk, uncertain investments within the stock market.