Anthony is co-founder and CEO of Vinovest, a platform for investing in fine wine. He has previously founded and sold two companies (EnvoyNow & Know Your VC), and is also a Thiel Fellow.
The way we invest is changing. Technology makes investing easy and more accessible than ever. Meanwhile, Millennials and Gen Z are gravitating away from public equity investments.
These changes have led to the rise of alternative assets. People are increasingly looking for new and innovative ways to approach investing. But are alternative assets truly the new frontier of modern investing?
What is an alternative asset?
As the name suggests, alternative assets are an alternative to traditional assets, like stock, bonds and cash. The term usually describes unconventional investments. That can include anything from a Honus Wagner baseball card to bottles of fine wine. However, it can also apply to more familiar investments, like real estate and private mortgages.
Simply put: alternative assets are the things that probably wouldn’t come up when you meet with your financial advisor. They are not easily categorizable, which makes them more difficult to manage. Often, people invest in alternative assets because of a passion for the asset rather than the immediate ROI.
What makes alternative assets an attractive investment?
Investors will go wherever there is money to be made. That includes alternative assets. In addition to higher potential returns, alternative assets have distinct characteristics from traditional assets. Here are a couple of factors to consider when looking at alternative assets: