Guest Post: How DIY Investors Can Manage Their Alternative Investments

A record $10.5 billion in alternative assets were bought in January 2022, according to investment bank Robert A. Stanger & Co. Inc – by Zak Boca of AltExchange

 


Traditionally alternative investments have been exclusive to accredited investors. But that’s changing, as fintech is helping democratize alternative investments to be more accessible, efficient, and affordable for individual investors.  

While alternatives are becoming more mainstream, managing them is a challenge for most investors. But, there are ways to do it. Here’s how DIY investors can best manage their alternative investments. 

Tracking your alternative investments’ performance

 
Believe it or not, most investors are still manually tracking their alts using Excel spreadsheets. This route requires tedious manual data entry, regular maintenance, and can become disorganized quickly. In fact, it’s not uncommon for investors to just simply give up on tracking their alts, simply because it’s so complicated (when done manually). 
 

How to manually track the value of your alternatives

 
If you do want to manually track via a spreadsheet, here are some metrics you should include to help provide a very basic rate of return:  
 

• The amount that you paid for the asset.
• The estimated current market value of the asset.  
• The selling price of the asset (if applicable).  
• The amount that was generated from the asset. (if applicable) 

 
But figuring out these numbers is complicated. While you definitely know what you paid for the investment, figuring out the current market value, the return generated, and the estimated selling price can be difficult to figure out, and often require referring to a third-party reporting system, or a performance report from the source you bought the investment from.
 

How to automate tracking your alternatives

 
Needless to say, tracking manually is an absolute pain for most. It requires many hours of extensive time and research, and there’s plenty of room for human error. 

But there are easier ways to track the value of your alternatives, via alternative investment management and reporting platforms. For example, AltExchange, unlike other alternative investment management platforms, is free for up to $1 million in assets tracked. 

Automating managing your alternatives eliminates the need for spreadsheets, hours worth of research, and room for error. Instead, you can track your alternatives like stocks, and get the full picture into how your investments are performing in real-time, all in one place.
 

The bottom line

 
Overall, during such a great period of uncertainty like the one that we’re currently experiencing, it’s no surprise investors are expanding into alternatives to hedge their portfolios against inflation and volatility.

Whether you decide to track your alts automatically via alternative investment platforms or manually in an Excel spreadsheet, it’s important to keep track of your alternatives’ performance like you would your stocks so you can make the best investment decisions possible.