Do you trust the markets to take care of your future?
In today’s economic environment, having options besides public stock, bonds and mutual funds may reduce the risk in most portfolios.
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These types of investments can be a powerful tool to create more resilient portfolios by diversifying from traditional investments and increasing potential returns.
In the investing world, cash, stocks, and bonds are conventional assets, and any asset class other than cash, stocks, or bonds is an alternative investment. Some common alternative investments are direct ownership in real estate via DST’s, commodities and oil/gas tax credit investments.
Many large institutional funds such as pensions and private endowments have always had a large portion of their portfolios in alternative investments, due to their longer investment horizons and low correlations with other investments. When the stock market is volatile and interest rates are going up (value of bonds is decreasing) having some money out of traditional investments often makes sense.
For some alternative investments, only accredited investors (individuals who have net worth exceeding $1 million or personal income of $200,000 or more per year are qualified to participate). We have an inventory of BOTH accredited investments and alternative options that do not require accredited investor classification.
A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing real estate. There are traded REITS in the stock market, but private REITS tend to be accredited investment, since it is not yet public.
Private REITs provide exposure to real estate as a hard asset and allows for income and potential growth not exposed to the stock market.
Interested? Speak with a Strategist
A direct participation program or plan (DPP) is a pooled entity that offers investors access to a business venture’s cash flow and tax benefits. DPPs are non-traded pooled investments in real estate or energy-related ventures over an extended time frame, often 3 – 5 years.
Why is it beneficial?
A DPP gives an investor partial ownership of an ongoing business enterprise with income and growth potential.
Interested? Speak with a Strategist
A Delaware Statutory Trust (DST) is a separate legal entity created as a trust under the laws of the state of Delaware. Investors can own a small percentage of an institutional property. When used for a 1031 exchange, the DST owns the property (or properties), and each investor holds beneficial interests in the DST.
Why is it beneficial?
The investor is able to change the investment without recognizing a taxable capital gain, allowing the investment to continue to appreciate, tax deferred. Using a DST the investor no longer has to be an active landlord and owns a small piece of a much larger property. In addition investors can put cash into a DST and get immediate tax benefits of owning real estate and also 1031 in the future to defer the gains.
Interested? Speak with a Strategist
A private placement raises capital by the sale of securities to a relatively small number of select investors. A private placement is different from a public issue in which securities are made available for sale on the open market to any type of investor.
A private placement issuer can sell a more complex security to accredited investors who understand the potential risks and rewards.
Interested? Speak with a Strategist
Several listed REITs are raising capital by issuing private preferred stock.
Why is it beneficial?
You get high income (5-6%), stock market insulation and a short hold time. This type of security is senior to common stock, meaning it is less risky than the common stock.
Interested? Speak with a Strategist
Opportunity Zones are described as an economic development tool, designed to spur economic development and job creation in distressed communities
Opportunity Zones provide tax benefits to investors by deferring taxes on prior gains invested in a Qualified Opportunity Fund.
Interested? Speak with a Strategist
Oil and Gas investments are a non-liquid investment in oil or gas that allows a reduction of taxable income based on the deposit, it also provides income from the oil or gas wells.
The year you invest, typically you can take ~75% of the investment off your taxable income and that savings is recognized the year of the investment. In addition you can have K1 income for an extended period of time. You do not get a lump sum return of your investment, nor is your investment ever liquid.
Interested? Speak with a Strategist
Creative Capital Wealth Management Group is a nationally recognized retainer based wealth management firm. We have been providing our clients access to vetted accredited investments for over 20 years and in over 20 states. Our long relationships with some of the most recognized alternative investment sponsors allows our clients access to small and less promoted alternative investments typically not found in most advisory firms.
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