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Wysłany: Sob 9:17, 19 Mar 2011 Temat postu: asics outlet 7249 |
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Running For Cover - Private Alternative Investment Funds Could Be the Safest Haven by Dominic Mazzone
With the absolute implosion of global financial markets, the investment world is learning that alternative investments need to be private. I don't think there has ever been a better illustration of a "pull down" effect within the last 70 years. It almost seems ridiculous to keep using the word "historic" as each day seems to be, or break a piece of financial history. Looking at the first half of 2008, we all sat back and said, " Wow, that was pretty bad. " I am guessing that many investors wish they could have capped their losses at the levels seen in the first half of the year. However, many didn't and more couldn't because the new question on everyone's mind has been where is the safe haven?
This has been a serious question that hasn't been answered, and I believe that it's mostly due to looking in the wrong places. When you don't trust the markets or the financial system that is supporting it, then why would you look for safety there? It's like being scared of flying because the last 100 flights have crashed, and the only thing you have to prevent your own flight from crashing is hope. Instead, you should be thinking of an alternative method of travel, just like investors should be thinking of an alternative method of investing. I know that there has been a lot of pre-programming by the financial world that hedge funds,[link widoczny dla zalogowanych], exchange traded funds, etc.,[link widoczny dla zalogowanych], are all alternative investment funds.
However, they are either trading on the public exchanges or using strategies that are trading through the public exchanges, and the result is that they have been annihilated like everything else.
One of the biggest reasons for going into an alternative investment has been that it should provide a good return and a diversification from traditional investments. It is not only that our views and definitions of what an alternative investment actually is have changed, but also diversification in general. Mutual funds, which have been the traditional investment symbol of diversification, are down and down big. Why? Simply because all of their positions are in the public markets. Emerging markets were also the new alternative direction for investors looking for diversification from US investments. However, in a very eye-popping report from Bloomberg, hedge fund closures in Asia have jumped 19% this year, and needless to say investors looking to the emerging markets found submerging ones instead. Redemptions are haunting them like many North American hedge funds and redemptions will bring one thing and one thing only, losses.
So, what do we do? For one thing, stop playing in a game that is controlled by forces that can't be controlled. Unlike public investments, private investments that are not publically traded have two things controlling their returns; their business model and the execution of that model. There are no analysts, institutions dumping shares, or crowd to run with or from. There is only the pure performance of that model. Now to be very clear, when the entire economy is going down it's hard to fight momentum and all things get affected in some way or another. But there is a big difference in being affected by performance and being affected by public perception. Also,[link widoczny dla zalogowanych], another very important factor to consider is that when everything is going down, unsecured investments are the first to get hit. Lehman shareholders are a classic case of this,[link widoczny dla zalogowanych], and by their bondholders also getting hit, it was a perfect illustration of what asset-backed really means and doesn't mean. Assets that are actually tangible can be liquidated to get your principal back. Investing in an alternative investment fund whose model is backed by a tangible asset provides another strong line of defense to protect your principal in the end.
I have spoken to several investors in the last week and they all have the same question, "Where do we place our money to shelter us from the market? " The answer to the question is in the question; the place needs to be somewhere that is away "from" the market, and not "in" the market. When you run for cover you're looking for protection. Protection from what may have already happened and what's to come. If you are thinking that safety is somewhere in the market, let me leave you with a question. Would you seek shelter from a hurricane by running into a tornado?
.Topics related articles:
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