Alternative Investments

I recently read a great book by down to earth investor, Larry E. Swedroe. In his book, The Only Guide to Alternative Investments You’ll Ever Need: The Good, the Flawed, the Bad, and the Ugly, Swedroe outlines a number of different types of investments with the main objective being to explain how one can diversify risk. As we all know, are a number of types of investments out there that dividend investors can use to round out their asset allocation, but only a few of them are actually worth pursuing.[ad#tdg-embedded]

Swedroe breaks down the large list of alternative investments in to what we calls the good, the flawed, the bad, and the ugly. Obviously his intentions are to lead you down the path of the good alternatives. I would highly recommend that investors read this book as it provides some very interesting details, especially about the downright ugly investment alternatives. Here is a sampling of the investments that fall within each category:

The Good

1. Real Estate
2. Inflation-protected securities
3. International Equities

The Flawed

1. Junk Bonds
2. Socially Responsible Mutual Funds
3. Emerging Market Bonds

The Bad

1. Hedge Funds
2. Variable Annuities

The Ugly

1. Equity-Indexed Annuities
2. Leveraged Funds

As I said, I would recommend that investors read this book, if only to understand how to really evaluate whether an investment asset would fit within your portfolio. Much of the investment world is one big sales pitch, and reading this book further confirmed that for me.

P.S. Other than the Amazon link above, I was not compensated for this post

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