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Why 2023 Is the Year of Alts

2023 is quickly approaching, and with it comes a new era of investment opportunities. Alternative investments are going to take center stage in the coming year, and advisors who don’t offer these options to their clients will be left behind. In this blog post, we’ll explore why alternative investments are so important, and some of the most popular options that are available. Don’t miss out on the next big thing – make sure you’re offering alternative investments to your clients to stay ahead of the curve.

Fireworks celebrating new year in 2023.
Source: Unsplash

Benefits of alternative investments

Alternative investments are becoming more and more popular, as investors look for ways to diversify their portfolios. By investing in alternatives, you can minimize your risk while maximizing your potential return. In addition, alternative investments often come with tax benefits that can save you money in the long run. Here are just a few of the reasons why alternative investments are so important:

  • Diversification: Alternative investments offer a way to diversify your portfolio, which can help reduce your risk.
  • Potential for higher returns: While there is always some risk associated with any investment, alternative investments tend to have higher potential returns than traditional options.
  • Tax benefits: Many alternative investments offer significant tax benefits, which can save you money in the long run.
Source: Unsplash

Why alternative investments gained popularity in 2022

Alternative investments gained tremendous popularity in the year 2022, as investors sought out new opportunities to diversify their portfolios and capitalize on higher potential returns. At the same time, the global economy was shaken by geopolitical events and political uncertainty, which drove many people to look for more stable investments with lower risk. Alternative investments offered appealing options that could not be matched by the public markets in 2022.

Here are some of the most popular alternative investments of 2022:

  1. Cryptocurrencies
  2. Hedge Funds
  3. Private Equity
  4. Real Estate
  5. Venture Capital
Source: Unsplash

How financial advisors can offer and manage alternative investments in 2023

Offering alternative investments to your clients is the first step, and it’s up to you to decide which ones to offer. Illiquid investments, like real estate, private equity, hedge funds may be limited to accredited investors, though access is increasing through new regulations and technology such as Carta, Juniper Square, YieldStreet, and plenty more.

The next step though is managing alternative investments. Most advisors are still manually managing alts, but as allocation increases, it’s imperative for advisors to have a streamlined, scalable solution to manage the complexities.

AltExchange's AdvisorVue client dashboard showing alternative investment performance details.
AltExchange’s AdvisorVue client dashboard.

AltExchange eliminates common pain points of managing complex alternative investments including fragmentation, unstructured data, scattered documents, limited performance visibility, and more. If you’re an advisor, investor, or asset manager looking for a full-solution management and reporting solution for alternative investments, please get in touch.

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