Displaying items by tag: alts

The mainstream financial world is all over the place when it comes to crypto however, Bridgewater Associates is planning on increasing their exposure to digital assets. The firm has made it clear they have some small investments in crypto, Dalio himself advises investors to allocate a small portion of their portfolios into crypto. It will most likely only be a small portion of their $150 billion portfolio but it is in phase 1 of 2. Marshall Wace, Point72 and Brevan Howard have all made crypto investments in the last year.


Finsum: Biden’s most recent crypto executive order legitimizes crypto in many investors eyes because it brings it into the traditional realm.

Published in Alternatives
Monday, 07 March 2022 19:07

REITs are an All-Time Buy Right Now!

Financial markets are extremely volatile as of late and that's putting it lightly, but REITs might be perfectly insulated at this moment and a great option. One of the largest sources of volatility is Russia and Ukraine but real estate is a local business and a solid option for those looking to alternatives. Another source of market risk is inflation however, real estate generally benefits from inflation. House prices outpace it and fixed-rate financing means debtors pay back less over time. Real estate also has leased on a long-term basis and insulted to most short-term shocks, and is a safe haven from typical equity volatility. Finally, if more turmoil suppresses interest rates then this will increase demand for real estate moving forward.


Finsum: We see the huge outperformance potential for real estate because of how uncorrelated the rate of return is with the rest of the markets right now.

Published in Alternatives

Private equity firms are overwhelmingly turning to private credit as a buyout means over traditional bank financing. In a survey by Dechert law firm 45% of private equity firms have increased their use of private credit in buyouts in the last three years, which was a 10% increase from the previous year. Now private credit only trails real estate and private equity in private capital assets and is expected to grow to $1.46 trillion by 2025. It's a combination of a borrowing flexibility and yield chasing that has investors opening the doors to private credit. Private markets also seem less tumultuous to global volatility with longer contracts that are locked up and untradable. This is a big reason more than 50% of PE firms said its their preferred method to finance buyouts.


FINSUM: Ultra low yields and global instability are the biggest draws to private markets, because we know they are statistically less correlated with super liquid debt markets.

Published in Alternatives
Tuesday, 09 November 2021 17:37

A Good Time to Invest in Infrastructure

President Biden spoke at the Port in Baltimore to celebrate the passage of the $550 billion dollar spending bill which will allocate $17.1b to ports like the one he spoke at. In order to expedite the spending spree, the White House said that $240 million of the bill will be allocated to grants that they plan to move on in the next 45 days. The Biden administration sees port infrastructure spending as part of a key process to alleviate the supply constraints in the U.S. economy that are a key contributor to record inflation in many policy makers' eyes. The Bill is already facing criticism from former President Donald Trump who says only a fraction of the bill's allotment will be spent on infrastructure. However, it was 11 republicans who stepped across the aisle that was key to passing Biden’s first signature piece of infrastructure legislation.


FINSUM: It would be a big win for the U.S. economy if the infrastructure bill could make substantial gains toward reducing inflation which has markets flummoxed and consumers concerned.

Published in Alternatives
Thursday, 04 November 2021 18:46

JPMorgan Picks its Big Winner for 2022

Strategists at JPMorgan Chase & Co see a weak market in traditional stocks and bonds coming in 2022. They say the remedy for your portfolio is in alternatives like hedge funds and real estate. It's not a small margin of victory either, JPMorgan is predicting a 6% gain in hedge funds and real estate over the traditional composition of stock and bonds. However, they are recommending investors be weary of crypto as they do expect gains but they will be too rocky to ride. In fact, volatility almost halves the value in the investment firm’s mind. JPMorgan sees macro trends dominating the funds because of a variety of factors like inflation and Fed tapering.


FINSUM: Macro hedge funds have struggled in leading up and going through Covid, but with inflation moving, the tide could be turning.

Published in Alternatives
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