Tiptoeing around alternative investments
Finweek English|6 August 2021
Some tips to consider when going ‘alt’.
Gareth van Deventer
Tiptoeing around alternative investments

Growing up I had a passion for listening to 80s pop music. But not everyone liked being part of the crowd and so “alternative music” was born and became a thing. It seemed so much “cooler” (80s slang) albeit a bit “darker” than pop as the artists brought out the wilder side of music. It was different and different somehow seems more exciting and mysterious, but different is not always properly understood or appreciated.

A little like today in the investment space, traditional run-of-the-mill investing is familiar to the crowd, but the appeal and mystery of alternative investments are certainly gaining traction.

The perception of alternative investments is that they tend to use complicated investment structures, calculations, methodology and assumptions and hence require much more understanding before venturing into this asset class. Things like derivatives, warrants, futures, contracts for difference, exchange-traded notes, and cryptocurrencies, to name but a few, are what typically pop into people’s minds when they consider “alternative investing”.

My first exposure to an “alternative” investment was back in the 1990s when the company I worked for decided to put a hedge in place on their funds to protect losses for investors. Basically, like taking out insurance to protect against an “unforeseen event”, the hedge structure had an additional cost for investors but seemed to do its thing. The hedge worked and limited losses for investors at a time when stock markets fell.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM FINWEEK ENGLISHView all
THE HEALTH OF SA'S MEDICAL SCHEMES
Finweek English

THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

time-read
7 mins  |
5 November 2021
The effect of Gilbertson's departure
Finweek English

The effect of Gilbertson's departure

With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.

time-read
3 mins  |
5 November 2021
Making money from music
Finweek English

Making money from music

Why investors are increasingly drawn to the music industry.

time-read
3 mins  |
5 November 2021
Conviction is key
Finweek English

Conviction is key

Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.

time-read
5 mins  |
5 November 2021
The post-pandemic toolkit
Finweek English

The post-pandemic toolkit

How CFOs can use technology to support growth.

time-read
4 mins  |
5 November 2021
Big city living exodus
Finweek English

Big city living exodus

Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.

time-read
3 mins  |
5 November 2021
Big compact, big value
Finweek English

Big compact, big value

Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.

time-read
3 mins  |
5 November 2021
On barriers to entry
Finweek English

On barriers to entry

There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.

time-read
2 mins  |
5 November 2021
Fear and greed in one index
Finweek English

Fear and greed in one index

To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.

time-read
3 mins  |
5 November 2021
Africa's largest data centre facility coming soon
Finweek English

Africa's largest data centre facility coming soon

Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.

time-read
3 mins  |
5 November 2021