real estate market Archives

Meanwhile, back on Earth, Jeff Bezos wants to be your landlord

Jul 11, 2021

Jeff Bezos just can’t get enough.

The king of e-commerce has partnered with Salesforce CEO Marc Benioff in the Space Race. There is formidable competition. Virgin Galactic founder Richard Branson, already a legend in air travel, has his own space ambitions, as does Tesla Founder and CEO, Elon Musk.

But back at mission control, Bezos is moving in on a neighborhood near you.

Fintech enters the housing market

Arrived Homes is the latest fintech app that aims to remove obstacles between individual investors and wealth-building opportunities.

At first glance, Arrived Homes seems like it’s lowering the barrier of entry to the real estate market. This will ring like a siren call to Millennials and Gen Z, already significantly behind where the Boomers were at this stage in their lives by measure of property ownership.

But things aren’t always what they seem. Peeling back just one layer reveals that Arrived Homes could lock Millennials and Gen Z out of homeownership for good.

Moving the goalposts

The cost of housing in the United States is primarily a function of supply and demand. As Millennials pay off student loans and negotiate salaries that resemble progress on paper, the cost of homes is always one step ahead. The price tag is always increasing a little faster, always just out of reach.

FRED data on median home proce — Data source: FRED St. Louis

Raises and promotions never seem to keep pace with the rising cost of living, creating a confusing life conundrum that has resulted in postponement of marriage and a free fall in birth rates.

Millennials are now in their late 20s and their 30s, and Gen Z is on the shores of adulthood. Both cohorts rightfully want their share of the proverbial pie.

Supply and demand, demand, demand

The pandemic brought on a Millennial wave of Urban Flight, as lockdowns made city dwellers realize just how small their living spaces really were. The influx of buyers in the already-tight liquidity market has led to home sales closing over asking prices by double digit percentages. According to Redfin, 70% of buyers faced bidding wars in May of 2021 – up from 52% of buyers in May 2020.

home buyers got in bidding war stat — Source: Redfin

Juxtapose that against a market whose supply stock has been stunted by city ordinances and permits, largely reserved for large developers with deep pockets. Not-so coincidently, those same developers also happen to be the benefactors of the housing subscription model.

Another sneaky force adding pressure in the mix is the rise of AirBnB. The short-term rental app took even more housing chips off the table. Its platform further incentivized the mindset that houses are investment assets to capitalize on – not homes that people need to live in.

These pressurized dynamics were already driving double digit ‘appreciation’ in real estate. According to a June S&P Global report, the U.S. housing market gained 14.6% in value year over year between April 2020–2021. At time of press, that trend is showing no sign of slowing.

Changing lenses

The real estate market’s ‘appreciation’ percentage gain is one way to present the fact that renting Millennials and Gen Z are now 14.6% further behind the American Dream, which for our intents and purposes here, starts with owning a home. It also loosely translates to “rent is probably going up soon.”

That makes for two demand-side pressures contributing to the price increase in the housing market, while the supply side has remained stagnant. How will we solve this problem?

One solution that definitely won’t work: Jeff Bezos’ latest project, Arrived Homes. Presumably, it’s about to throw gasoline on an already overheated market.

Jeff Bezos is a man of profound talents. But great talent can be applied to bad visions with harmful ramifications. Indeed, misguided ambition can amplify the fallout of a small-context vision.

American Dream for sale

Arrived Homes will accelerate the transformation of the American Dream into an ‘investment class’ that appreciates. That’s a big change from its place as a milestone of “making it,” and symbolism of freedom and independence.

The housing market’s assetization is reminiscent of the successful conversion of higher education into an investment, which learned everything it knew from the capitalization of health care.

Arrived Homes creates an access point for investment capital to flow into the pressure cooker that is the American housing market. It creates more demand without a corresponding supply expansion. You don’t need a finance degree to understand that when demand exceeds supply, prices will continue their exponential climb.

Getting buy in

As material wealth continues to consolidate into fewer hands, young adults will continue to find themselves in perpetual debt without ever owning anything.

world economic forum, you'll own nothing and you'll be happy — Still from World Economic forum YouTube channel for editorial commentary purposes

In fact, the World Economic Forum came right out with recommendations to get comfortable with the idea of perpetual serfdom. What a message. But don’t worry: We’ll be happy. The economists at the World Economic Forum, who are much smarter than us, said so. Apparently, their cum laude is supposed to mean we’ll believe anything they say is true.

Intentionally or not, Arrived Homes deceptively positions itself as granting access to a market that it is actually shutting people out of. Americans don’t need partial ownership in rental properties: They need a primary residence. The number of renters officially eclipsed the number of homeowners in 2018, and the divide has been growing ever since.

The math isn’t hard: Every property added to Arrived Homes’ portfolio is one house’s status going from owned to rented.

Collective commercial real estate investing

But it doesn’t have to be this way. HappyNest is a collective investing, real estate fintech app that, first of all, arrived to the market before Arrived Homes did. Our platform gives real people access to a market they never could realistically consider – the literal inverse dynamic that Arrive Homes creates.

HappyNest seeks to help people grow their primary nest egg, by opening doors to wealth-generation opportunities without slamming the doors on other future prospects. That’s because HappyNest’s investment portfolio consists of commercial and industrial properties, a lucrative asset class that has historically only been available to the wealthy and connected.

But by pooling capital from real people, we can cultivate access to possibilities we couldn’t accomplish individually. By teaming up with HappyNest, investors aren’t indirectly driving up living costs and minimizing their homeownership prospects in the future.

Jeff Bezos’ next move

Wouldn’t it be wonderful if Jeff Bezos instead applied his incredible gifts and talents to something that enriched communities, not just board members? The man has the world at his fingertips – any further personal wealth accumulation at the expense of others is no longer ethically justifiable by ambition alone. It’s hard to imagine there would be a tremendous change in his living standard compared to what he’s established after his first few hundred billion.

We already know Jeff Bezos can accomplish whatever he sets his mind to, for better or for worse. Who will be impressed if he makes another successful business? At this point, it’d be more surprising if he didn’t. Any more wins in this arena are expected – boring, even.

Dramatic Crossroads Yu-Gi-Oh Card by AlanMac95 on DeviantArt

Perhaps Bezos should consider expanding his definition of value and worth. He could challenge himself to look beyond dollars, patents, property, and copyrights. He could focus on drawing up the blueprint for more conscious capitalism – one that is focused on ‘win-win’ as opposed to ‘win-more.’

Can Bezos sell the vision of a cleaner, more equitable world? Could he work out the operational inefficiencies in energy production and consumption? Can he set up the infrastructure for every American to get quality health care with Prime-level speed? How about cut the cost of lifesaving products like insulin while still maintaining enough margin to support a healthy business?

Can he change gears now, from building an empire, to investing in a legacy?

We hope we live to see it. If Jeff Bezos were to pursue a venture like that – we’d buy the first share.

Thinking two steps ahead

But with this next venture – Arrived Homes – the answer appears to be ‘not for now’.

Perhaps the allure of becoming the world’s first trillionaire is something he simply cannot resist. It almost seems that the biggest weakness of the world’s most successful man is one most of us can relate to in some way or another – our own egos.

Once he’s conquered the real estate market to his liking, he might still have time to achieve his greatest feat yet – merging aptitude with empathy, while Millennials and Generation Z sort through the damage his monumental success has inflicted upon their lives.

Until then, we invite you to think not just one, but two steps ahead in your investing journey. Together, we can get our share of the American Dream, too.

And some things are worth fighting for.

Inflation is coming – how will it impact the real estate market?

Jun 18, 2021

By Tanja Fijalkowski

There’s little doubt inflation is coming. By some measurements, it’s already here. The question is: How do you proactively hedge your portfolio against this value crusher?

If history is any guide, private real estate is the heavyweight champion of inflation hedging compared to alternative investments.

To better understand what lies ahead, we need to understand how we got here, and why real estate tends to perform well during periods of high inflation.

What is inflation?

Nobel prize-winning economist Milton Friedman once said: “Inflation is taxation without representation.”

That’s because inflation is primarily a function of federal policy on things like interest rates and price controls. These things have the ability to erode your purchasing power significantly, and the decision makers are appointed, not elected.

Inflation is often the product of increasing the supply of currency without a corresponding increase in economic output.

It’s important to understand that the value of anything is dynamic and relative. Economists assess the value of a currency against things like other currencies, the cost of goods, and asset pricing over time.

As costs increase – particularly on fundamental commodities like oil, timber, or metals – purchasing power decreases. Inflation is afoot.

How is inflation measured?

Economists have created several models to calculate the rate of inflation.

The federal government has two ways of measuring inflation. There’s:

Inflation rate: Poorly labeled, what is often referred to as the ‘inflation rate’ is actually an index that measures the rate of change in inflation compared to the previous period (year over year, for example).

Consumer price index (CPI): CPI is a calculation based on the prices of consumer goods across various sectors, such as the cost of energy, groceries, housing, etc.

CPI is the metric that impacts the average American directly, as it is based on recurring household expenses. As the cost of these goods rises, Americans feel the pinch.

In April 2021, Federal Reserve Chair Jerome Powell announced that the consumer price index had clocked in at 4.2% for the month.

That’s the highest monthly rate of increase since 2008 – and we all remember what happened in 2008.

Inflation on Wall Street

This increase was expected. The Federal Reserve printed trillions of dollars in order to address the economic fallout due to shutdowns ordered in response to COVID-19.

It’s hard to be economically productive in lockdown. As a result, the output of the United States (GDP) went down by 2.3%. Not bad, all things considered.

Yet, the S&P 500 – an index that reflects the 500 biggest companies in the U.S. – gained over 16% during the same period.

Peel back another layer of this onion and things get even more eye-watering.

Price-to-earnings ratios (PEs) are used to assess how expensive a stock is relative to the underlying company’s earnings. The higher the PE ratio, the more expensive the stock is.

Between January 1, 2020 and January 1st 2021, the S&P 500’s overall PE ratio jumped from 24.88 to 40.3. That’s just shy of a 40% increase.

S&P 500's PE ratio (2010-2020) (1) — Data source: multpl

Clearly, gains were not based on the improvement in performance of the S&P 500 companies, but on an influx of capital into the markets.

The logical explanation for this disparity is that a considerable portion of the newly minted greenbacks found their way into the stock market.

Stocks simply got more expensive. Investors need more capital to buy the same amount of shares they did in 2019 without the fundamentals of the companies backing that price hike. This discrepancy reflects inflation.

Inflation on Main Street

As asset and commodity prices increase, the purchasing power of the dollar declines.

It’s a sneaky force that debases the value of your savings account.

The cohort that ends up paying the heftiest price for inflation are wage and salaried workers – particularly if they don’t own assets that appreciate in value. Wages haven’t historically kept pace with inflation, let alone during years of elevated levels.

Put it this way: If you had $10,000 sitting in a savings account in April 2020, you’d need to have $10,420 in there now to buy the same amount of goods this year.

And that’s only if you trust the numbers reported by the Federal Reserve.

Other economists, including famed contrarian investor Michael Burry – who foresaw the 2008 Financial Crisis – believe the real rate of inflation is significantly higher than the numbers reported by the fed.

Real estate as an inflation benchmark

In addition to the S&P 500, the real estate market serves as a reliable benchmark for inflation indexing. That’s because the need for housing remains fairly consistent, and the supply grows slowly.

According to a report by Zillow, the housing market gained 7.4% in value during 2020. Furthermore, Zillow projects this trend will not only continue, but accelerate throughout 2021.

If you own property, that’s good news. Your net worth just grew by however much your real estate asset(s) appreciated.

If you don’t…you slipped 7.4% further behind on your journey to homeownership. That figure could well be 15% by the end of the year against the 2019 level.

Time to ask the boss for a big raise.

Considering the real estate market gained 7.4%, and the S&P 500 gained 16% in 2020, perhaps Burry is right to raise an eyebrow at the Federal Reserve’s reported CPI of 1.4% for 2020.

Inflation on the global stage

A hallmark of inflation is that the prices of commodities start to rise, particularly in assets where production of the supply has bottlenecks or lead times, and therefore grows slowly.

To understand this better, it can be helpful to think of the dollar itself as an asset.

After all, the global community certainly does. That is why many foreign governments hold large reserves of U.S. dollars.

Relative to other countries, the U.S. has enjoyed decades of growth and stability. Subsequently, the U.S. dollar has proven to be a reliable store of value, particularly relative to other volatile currencies.

However, the DYX –a measurement of the dollar’s value compared to a handful of other foreign currencies – has been melting like an ice cream cone on a hot summer day.

Because the U.S. dollar is the global reserve currency, a big slide in the DXY could prove especially catastrophic if foreign governments were to liquidate their holdings.

We don’t know, J.Pow, but those inflation numbers just aren’t checking out.

Why real estate thrives during periods of inflation

When it comes to inflation and real estate value, it’s a classic case of ‘a rising tide raises all boats.’

From an investment standpoint, an asset with a fixed or slow-growing supply, but steady or increasing demand, will gain value over time.

Building a house requires permits, materials, construction time, and financing. The growth in supply tends to be slow.

Constricting supply growth either further, the price of building materials for new homes have skyrocketed over the last year.

The cost of lumber, for example, exploded 130% to historic highs in 2020 alone. Steel and concrete are also experiencing sharp price increases.

That adds additional challenges to expanding supply. Meanwhile, thanks to the work-from-home and ecommerce revolutions, demand in several real estate sectors has skyrocketed.

Money printer go ‘BRRR’

Now, let’s sprinkle in that extra three trillion dollars that got injected into the economy in stimulus measures. That alone would have led to significant gains in the real estate market.

Let’s say we have a total economy worth $1,000,000, and a total of 10 houses in the real estate market worth $10,000 each.

If the same economy then prints another $1,000,000 – without a corresponding increase in economic output – the total economy is now worth $2,000,000. Those same houses are now worth $20,000.

Good if you owned one of those houses. Less than optimal if you didn’t, particularly if your bosses didn’t give you a 100% raise during the same time.

The U.S. did not double the amount of dollars in circulation like in the example above. But it illustrates the point that real estate appreciates in tandem with inflation.

Interest rates, the accelerant

Despite shutdowns and high levels of unemployment, the real estate market gained more value in 2020 than it had in any other year since 2005.

Part of that is that the borrowing costs of money have been historically low. Borrowing money is easy and cheap, enticing more potential buyers into the market.

Institutional investors take advantage of these low rates by borrowing at 0% and investing that money into assets that yield 5% or more – like the real estate market, because hell, why not?

Real estate is an attractive investment to whales, because it can generates income in the form of rent from the jump. Rent prices increase with the value of the leased real estate. (Brace yourselves, renters).

By setting up REITs, institutional players can optimize yields through corporate tax exemptions.

Given that the Central Bank recently said they wouldn’t hike interest rates in the near term, the real estate market’s value appreciation is slated to continue as interest-free investment capital flows in.

This adds more weight to the demand side of the equation.

Get your slice

You may have caught on already, but there are winners and losers when it comes to inflation.

The winners own assets and investments that appreciate substantially without any extra effort on their part.

Unfortunately, waged and salaried workers whose pay doesn’t keep pace with rising commodity prices get pinched. Their purchasing power is increasingly eroded. The average 2–3% annual raise fails to reconcile the decline of the dollar’s purchasing power.

With indicators of inflation already flashing code red and graphs moving into exponential inclines, investing in real estate can protect your net worth against erosion in value.

Even if you’re not in a position to buy property, you can enjoy the market’s gains by investing in REITs like HappyNest, for as little as $10. From there, it’s entirely up to you how much you want to invest, every dollar of which carves out your stake in the real estate market and its future gains.

Getting on the right side of inflation

HappyNest generated 5%+ returns every quarter – for a total of over 20% compounded annualized return – for its shareholders in 2020.

Our shareholder ROI outpaced both the S&P 500 and the overall real estate market’s gains, even accounting for the influx of capital and inflation.

As HappyNest’s portfolio of properties appreciates in value, so will your investment. While investing always comes with risk, HappyNest’s properties currently have reliable tenants like FedEx and CVS on 8- to 10-year lease agreements. We don’t anticipate any interruption of dividend payments. We expect to have ample time to react in the event of an unexpected vacancy.

Learn more about the properties in our portfolio.

Think outside the stock market: Alternative investments for 2022

Nov 20, 2020

By Tanja Fijalkowski

Diversify your portfolio with alternative investments.

Those early in their investment journey might take that to mean buying stocks from a few different companies whose operations are uncorrelated.

But that would amount to a basket with some different colored eggs in it, all still bound to the fate of the basket.

Though the stock market is the investor go-to, the rise of algorithmic trading has tangled the performance of individual companies to the market at large.

That’s why investors are looking to diversify their portfolio by investing outside the stock market in alternative investments.

What are alternative investments?

It’s easier to characterize alternative investments by what they are not. They are not cash, public stocks, and bonds. Consequently, they are generally less liquid and longer-term strategies.

On the upside, they open numerous avenues and opportunities ranging from safe investments with steady yield to high risk-investments with potentially quit-your-job returns. But where to start?

Here are seven of the best stock alternative investment ideas investors can consider.

Alternative investment 1: Private REITs

Barrier of entry: Moderate
Risk factor: Low
Potential returns: Above average

One way to get into the real estate market is through a private REIT. They have all the characteristics of REITs traded on the stock market, except they are privately held.

Real estate is widely considered to be a safe and reliable investment over time. Private real estate investment group are also insulated from stock market volatility since the aren’t caught up in EFT and other stock collectives.

A private REIT uses pools investor capital to purchase and maintain property. As a shareholder, you buy into that portfolio and enjoy the property value gains.

One of the biggest upsides to investing in property is that it generates income. Most alternative investments require capital to be tied up for an extended period of time, and any profit only comes at the point of selling. Real estate also accumulates profit for the point of sale in the form of market value. But it also had the added benefit of generating income while your capital is invested in the form of rental payments.

Compared to buying investment properties and managing them independently, REITs are a ‘set it and forget it’ investing strategy that involves zero late-night tenant plumbing emergencies nor tens, if not hundreds of thousands upfront for a downpayment and a commitment to a mortgage.

HappyNest, for example, allows investors to buy in for as low as $10. By investing in HappyNest, you become a partial owner of our portfolio, which includes an industrial shipping facility currently on a 10-year lease with FedEx and a commercial pharmacy on an 8-year lease with CVS.

That means your can build a passive income stream by becoming the landlord of companies you know are good for rent.

Alternative investment 2: Cryptocurrencies

Barrier of entry: Low
Risk factor: Above average
Potential returns: Above average

Right now, there’s little doubt the United States in poised for growing inflation in the years ahead. Trillions of dollars were printed and put into circulation without a corresponding growth in economic output.

That’s bad news for savers, and impetus enough for investors scrambling to find stable, alternatives to preserving their net worth.

That’s at least part of why cryptocurrencies have gained so much traction from investors.

Once considered somewhat of a joke by big-name investors, the attitudes around Bitcoin and other digital currencies has taken a drastic turn in 2020.

With global markets volatile and the future opaque, a currency independent politics, governments, and stock markets look pretty appealing nowadays.

Flagship Bitcoin has trail-blazed for other cryptocurrencies to get on the radar of institutional investors. Major companies like Microsoft, Shopify, PayPal, CashApp, and Amazon (through a third-party app) now accept Bitcoin, with more on the way.

Some of the brightest minds of our time have taken public interest in the space. Their involvement all but guarantees the space’s growth for the foreseeable future.

The upside to foreign and cryptocurrencies compared to other alternative investments is that they are highly liquid. You can also invest just a few dollars if you want to, so the commitment level is low.

This stock alternative investment has a promising long-term trajectory that is becoming increasingly difficult to dismiss.

However, there are still challenges ahead. The space will likely continue to experience high volatility in the coming years, so investors have to be able to stomach that.

That being said, the whiplash to those price swings can generally be remedied by zooming out on the time chart. The overall trend is still a steady march upward and forward.

Alternative investment 3: Gold, silver, and other precious commodities

Barrier of entry: Moderate
Risk factor: Above average
Potential returns: Variable

At the end of the day, gold is widely considered to be the best alternative investment of all time. After all, it is the undisputed GOAT when it comes to currency longevity. Silver and other precious commodities like copper,

There are several ways to get into trading these, but gold enthusiasts believe in its long term value as a hedge against the collapse of FIAT currency and/or the stock market.

There’s some truth to this claim. As the purchasing power of the dollar declined in the wake of the Great Recession, gold’s price went parabolic.

gold 30-year price chart history, gold is seen as an alternative investment class — goldprice.org

Precious commodity hodlers argue that it has intrinsic value not only in its widespread recognition, but because it also has industrial applications.

On the long term, the upside of gold and other precious commodities has held up for those with patience and long-term horizons. Gold holders had to ensure a major price correction and 7-year sideways period before finally seeing some movement to the upside in late 2019.

Alternative investment 4: Private credit: Private debt

Barrier of entry: Low
Risk factor: Above average
Potential returns: Above average

Peer-to-peer lending cuts the middle man (i.e., the bank) out of lending.

Through platforms like Lending Tree or Peerform, you can lend money (investment) to a person or a business. Then, you play banker and charge interest on repayment.

The returns on private debt can be high – in the double digits.

But for every yang, there’s a yin. High potential returns come with high potential risks.

Applicants’ risk profiles oftentimes do not meet the loan criteria for standard banks. That’s something the private lender (you) have to be willing to take on. If the borrower defaults, well, c’est la vie.

That being said, peer-to-peer lending as an alternative investment idea tends to perform better in economic downturns. That’s because banks become more risk averse and tighten their lending criteria.

In a study released in August of this year by MarketWatch, the peer-to-peer industry was projected to grow by 30% – a sign that investors aren’t quite bearish on this alternative investment strategy just yet.

It’s also worth noting that the industry as a whole saw a high growth period after the Great Recession of 2008 as the credit markets recoiled.

That could mean that 2022 might shape up nicely for those with a bullish risk tolerance.

Alternative investment 5: Private equity

Barrier of entry: High
Risk factor: High
Potential returns: Max

Embrace your inner hipster: Find the next big thing before it goes mainstream.

That’s private equity investing 101.

The key differentiation between private equity and publicly traded stocks is that stake in the company is not available to just anyone.

And just like the sharks, private equity firms generally invest in startups, privately held companies, and companies in distress.

They provide the capital the company needs, either to scale or overcome an obstacle, as well as ‘business management services’ (for better or for worse).

At the end of the day, the goal of private equity investment is to generate value and return for investors – and a lot of it.

The good news is, according to global capital management firm Bain & Company, private equity investments have generated a 60% higher return on investment compared to the S&P 500 over the last 30 years.

The bad news is that unless you spend your Wednesday afternoons on the golf course, private equity might be prohibitively expensive to get into.

A $250,000 would be on the lower end of the entry price to go through an institution – and to be properly ‘accredited.’ But keep in mind: that buy in is still the coach class, boarding group C of private equity.

Alternative investment 6: Hedge funds

Barrier of entry: High
Risk factor: Medium
Potential returns: High

Hedge funds are similar to private equity. They pool investors’ money and make strategic deals they’re betting will produce return. They’re also similar in that they require investors to be ‘accredited’ (read: a certified rich person).

Like private equity, a $250,000 minimum investment is par for the course. It can run many times higher depending on the firm.

The key differentiator between hedge funds and private equity is the types of asset investments they make.

Like private equity, hedge funds also buy stakes in private companies. But hedge funds investment strategies are more diversified.

They also invest in public companies, real estate, and tangible commodities that appreciate like gold, fine art, wine, and collectibles (rumor has it the hedge fund manager who bet big on beanie babies in the ‘90s is no longer in the business).

Big hedge fund managers are the celebrities of Wall St. – Ray Dalio, George Soros, and Bill Ackman. Those with the means to buy into their exclusive club can ride their coattails into the sunset.

Warren Buffett, is not a hedge fund manager. What makes him different? Unlike hedge funds, the average investor can ride his coattails…by buying public shares in his company Berkshire Hathaway – no ‘accreditation’ required. No wonder he’s America’s favorite billionaire.

But if you can swing it and meet the accredited investor criteria, hedge funds tend to be pretty hands-off investments. After all…you’re outsourcing managing that part of your wealth to someone else.

Alternative investment 7: Venture capital

Barrier of entry: Moderate
Risk factor: High
Potential returns: High

Venture Capital is what companies need to either kick off or start scaling. It is the earliest round of investing companies get as they start to dial up operations.

You can become a venture capitalist fairly easily thanks to angel investor sites. They allow you to browse through young companies seeking out capital. Many of them aren’t asking for millions. Some only need a few thousand to get through a financial bottleneck that’s holding them back.

If you’re seasoned in the particular industry, you could really hit it big as in the alternative investment space of venture capital.

But it’s important to understand that most businesses at this stage do fail, so. you are at risk of losing a large portion, if not all of your investment. Additionally, even if the company you invest in does ultimately achieve great success, the timeline you’d be operating on is long – several years, potentially a decade or more to see real returns from. As far as getting your investment back out earlier than that? Iffy at best.

So while Venture capital might be one of the highest potential alternative investment ideas, it also comes with quite a bit of risk.

Adding alternative investments to your portfolio

Now that you’ve expanded your view on potential investment opportunities, it’s time to consider if branching out makes sense to you.

If you’re portfolio is too concentrated in public equities and you want to manage your risk, allocating a slice of your net worth to a private REIT or other non-traded investment class will alleviate the pressure – and give you opportunities to catch big wins.