A Los Angeles-based financial advisor and securities industry executive, Micah Scheinberg has 25 years of experience in the field and brings that experience to his position as managing director with Alex Brown, a division of Raymond James. Micah Scheinberg also has extensive knowledge of alternative investing.
A financial asset that doesn't fit into any of the conventional investment categories (such as stocks and bonds) is known as an alternative investment. Private equity, managed futures, hedge funds, commodities, and derivatives contracts are examples of alternative investments.
Because of their relative lack of regulation, complexity, and high risk, most alternative investment assets are owned by institutional investors or accredited high-net-worth individuals. Despite the fact that initial investment minimums of alternative assets may be too expensive for most investors, transaction costs are generally lower than traditional assets due to reduced turnover.
Alternative investments usually have little in common with traditional asset types. Because of their poor connection, they frequently move in the opposite direction. This feature makes alternative investments excellent instruments for portfolio diversification, as well as an effective inflation hedge. As a result, many large institutional funds, such as pension funds and private endowments, dedicate a part of their portfolios to alternative investments.
