Alternative investment vehicles to help you unlock financial freedom

By wazup on April 7, 2023 Comments Closed / 119 views

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Alternative investment vehicles to help you unlock financial freedom

Friday April 07 2023

The Covid-19 pandemic left us with so many lessons to learn from as far as investment is concerned. What may seem like a stable economy can quickly be turned upside down.

Many people lost their jobs and household incomes within the blink of an eye and were left struggling to make ends meet.

This drastic occurrence forced individuals, including investors, to rethink the available investment options in the market.

Some of the most common alternative investments in the Kenyan market today are real estate, private equity, commodities and infrastructure assets.

If you opt to put your money in real estate, this means that you will be able to invest in property and land while private equity involves buying shares in companies that are not listed on a public exchange or buying shares of public companies with the intent to make them private.

Commodities investments may be in physical commodity products such as grains, metals and crude oil, either through owning cash instruments, using derivative products, or investing in businesses engaged in the production of physical commodities.

As an investor, the main vehicles you will use to gain exposure to commodities include commodity futures contracts and funds which are benchmarked to commodity indexes.

Infrastructure assets on the other hand are capital-intensive, long-lived, real assets, such as roads, dams, and schools, which are intended for public use and provide essential services.

Infrastructure assets may be financed, owned, and operated by governments, but increasingly the private sector is investing in infrastructure assets. Investors may gain access to these assets directly or indirectly.

Alternative investments are an ever-evolving industry, and opportunities emerge regularly. The industry is expected to see new opportunities for international investment as well as new types of alternatives to invest in.

The best types of investments to make depend on your risk tolerance, level of understanding of certain markets, timeline to avoid capital gains and reasons for investing in the first place.

It is important to seek investment guidance from an expert who will hold you through your investment journey and avoid being scammed of your hard-earned money.

Joyce Kiragu is General Manager at Orient Asset Managers Ltd.