Why Do Alternative Investments Matter?

 
 

 Watch how the power of alternative investments can generate strong returns. Blue Sky Alternative Investments Limited is an Australian-based diversified alternative asset manager specializing in four asset classes: Private Equity, Private Real Estate, Hedge Funds and Real Assets.

Introduction to Alternative Investments

 

An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and cash. Alternative investments can include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts. Real estate is also often classified as an alternative investment.

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Principles of alternatives investing

Explore 9 key principles for investing in alternatives

 
 

In our Principles of Alternatives Investing we provide 9 key insights to help investors understand alternative investments and the impact they can have on portfolios.

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Chart your course with Alternative Investments

 

Today more than ever, alternatives should be part of your core.
Alternative investments offer your clients opportunities that traditional 60/40 portfolios cannot. Consider redesigning your portfolios with alternative strategies that can help provide diversification or seek to amplify returns through access to private markets.

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Fairhaven Investment Videos

Million Dollar Cup of Coffee

 

Enjoy a Million Dollar Cup of Coffee individually, or with your heirs.

Investing knowledge for all of us – learning one cup at a time.

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The Rule Of 72

Link to calculation table & video

 

The “Rule of 72” is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.

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Why Every Institutional Portfolio

Needs Exposure To Managed Futures

Ernest Jaffarian

 
 

Ernest Jaffarian is a 30 years veteran within the alternative investment industry. He started his career as a floor trader in 1986 and quickly become a lead market maker. In 1993 he co-founded a CTA and in 1999 he set up Efficient Capital Management, a pioneer in the Managed Futures space.

Thirty years ago Ernest believed the day would come when institutional investors would consider managed futures allocations to be normal and prudent. Today, Jaffarian is encouraged that the dream is beginning to happen and the CTA industry is in the healthiest state he has “ever seen.”

Ernest Jaffarian is a 30 years veteran within the alternative investment industry. He started his career as a floor trader in 1986 and quickly become a lead market maker. In 1993 he co-founded a CTA and in 1999 he set up Efficient Capital Management, a pioneer in the Managed Futures space.

How The Economic Machine Works

 

Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, “How does the economy really work?” The video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur.

To learn more about Economic Principles visit: http://www.economicprinciples.org.

Based on Dalio’s practical template for understanding the economy, which he developed over the course of his career,

The Definitive Warren Buffett Collection

 

Warren Buffett

The Warren Buffett Archive is the world’s largest collection of Buffett speaking about business, investing, money and life. In his own words with short videos. Warren Buffett’s enormous success, along with his middle-American common sense and self-deprecating sense of humor, have helped make him one of the world’s most admired billionaires.

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The Definitive Ray Dalio Bridgewater Collection

 

Ray Dalio

Ray Dalio – founder of Bridgewater Associates, the world’s largest hedge fund — has released a 30-minute version of his bestseller “Principles,” in eight parts. Dalio said he specifically wants new college graduates to view the series.

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What is ‘Risk Tolerance’?

 

risk tolerance

Different investors have different levels of Risk Tolerance.

Risk tolerance is the degree of variance (i.e. volatility), in returns an investor is willing to allow in an investment or portfolio. One aspect of portfolio construction is the time horizon (i.e. duration), for a portfolio.

For example, a younger investor may be willing to take on greater risk than an investor who is closer to retirement, and is therefore able to be more aggressive in seeking higher returns, by accepting greater volatility.

You should have a realistic understanding of your ability and willingness to stomach large swings in the value of your investments; if you take on too much risk, you might panic and sell at the wrong time.

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What does ‘Risk Averse’ mean?

 

risk averse

Risk averse is a description of an investor who, when faced with two investments with a similar expected return (but different risks), will prefer the one with the lower risk.

A risk-averse investor dislikes risk, and therefore will stay away from adding high-risk stocks or investments to their portfolio and in turn will often lose out on higher rates of return. Investors looking for “safer” investments will generally stick to cash, certificates of deposit (CDs), Treasury bills, and government bonds, which generally have lower returns.

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What is the ‘Risk-Return Tradeoff’?

 

risk return trade off

Risk return tradeoff is important in designing an investment portfolio.

According to the risk-return tradeoff, invested money can render higher profits only if the investor is willing to accept the possibility of losses and greater volatility.

The risk-return tradeoff determines how aggressive an investor wants to be with the assets and underlying investments included in the portfolio. An investor should be aware of his personal risk tolerance when constructing a portfolio. Low levels of uncertainty or risk (low volatility), are associated with low potential returns, whereas high levels of uncertainty or risk (high volatility), are associated with high potential returns.

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Risk Premium – There Is No free Lunch!

 

risk-premium
A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield; an asset’s risk premium is a form of compensation for investors who tolerate the extra risk, compared to that of a risk-free asset, in a given investment.

Think of a risk premium as a form of hazard pay for your investments. Risky investments must provide an investor with the potential for larger returns to warrant the risks of the investment.

For example, high-quality corporate bonds issued by established corporations earning large profits have very little risk of default. Therefore, such bonds pay a lower interest rate, or yield, than bonds issued by less-established companies with uncertain profitability and relatively higher default risk.

Risk Compensation

Investors expect to be properly compensated for the amount of risk they undertake in the form of a risk premium, or additional returns above the rate of return on a risk-free investment such as government-issued securities. In other words, investors risk losing their money because of the uncertainty of a potential investment failure on the part of the borrower in exchange for receiving extra returns as a reward if the investment turns out to be profitable.

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Tony Robbins Dispels Some Common Myths About Investing

 

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One-on-one with Tony Robbins dispelling common personal finance myths related to investments.

When I asked Warren Buffet his secret to wealth. He said three things; Number one was being born in America. Number two is good genes so I’ve lived a long time. And Number three was compound interest and diversification – that’s it. Most people don’t understand you can tap those powers.” – Tony Robbins

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WorldOMeters
See the World in Real Time

 

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Live real time world statistics on population, government and economics, society and environment, food, water, energy and health. Interesting statistics with world clocks; including forest loss, carbon dioxide co2 emission, world hunger data, energy consumed, and a lot more!

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TED Talks

 

TED is devoted to spreading ideas, usually in the form of short, powerful talks (18 minutes or less). TED is a global community, welcoming people from every discipline and culture who seek a deeper understanding of the world. We believe passionately in the power of ideas to change attitudes, lives and, ultimately, the world. On TED.com, we’re building a clearinghouse of free knowledge from the world’s most inspired thinkers – and a community of curious souls to engage with ideas and each other.

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Optimizing The Speed Of Knowledge
Through Ideas

 

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In our digital age, we’re drowning in information. The web offers us infinite data points—news stories, tweets, wikis, status updates, etc—but very little to connect the dots or illuminate the larger patterns linking them together. Our ever-growing network of 2,000 Big Think fellows and guest speakers, comprise of the top thinkers and doers from around the globe.

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