Main differences between traditional and alternative investments

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There are considerable differences between the two types of investments. Traditional investments have a high liquidity profile, assets in public markets, high correlation with markets, passive shareholders, lower returns but also lower risk, in addition to greater stability.

Alternative investments have lower liquidity, assets in private markets, low correlation with markets, active shareholders, higher returns, but also greater risk and instability.

Another difference is availability. To invest in traditional assets, you will bahamas phone number list have to trade them on conventional platforms, such as brokerages or stock exchanges, while alternative assets are available through fintechs and exchanges that specialize in one or more alternative assets.

Advantages x Disadvantages
Like any type of investment, alternative investments have a series of advantages and disadvantages ― it is up to your financial team to consider what weighs more on the scale.

Advantages:
Diversification of the investment portfolio;
The lack of correlation with the traditional financial market means that these assets are not affected by financial, political or other crises;
Protection against inflation movements;
Possibility of greater return;
Disadvantages:
Lower liquidity;
Higher risk;
Difficult access to quality services;
Conclusion
In short, alternative investments offer a variety of options beyond traditional models, allowing companies to innovate their financial strategies . Understanding the characteristics and types of these investments, such as cryptocurrencies, private equity, venture capital, real estate, and collectibles, is essential to making informed decisions.

However, while these assets may provide higher returns and inflation protection, they also present higher risks and lower liquidity. Therefore, it is crucial to align these alternatives with the company's priorities and seek guidance from financial experts.

Carefully evaluating the advantages and disadvantages will help you maximize the benefits of these investments while minimizing the risks. Thus, exploring alternative investments can be a valuable strategy for diversifying and strengthening your company’s asset portfolio.