Exotic Alternate Investments by Kevin Mirabile provides an in-depth analysis of the returns, risks, opportunities and portfolio effects for investors, advisors and academics and anyone who wants to expand their investment horizons. In this brief Q&A, Mirabile shares his thoughts on the various investment opportunities.
1. What are exotic alternative investment opportunities?
An exotic alternative investment is anything that is new or unique, hard to value, that has a low correlation to traditional stocks and bonds and offers attractive returns.
2. How did the exotic investments perform relative to both traditional and alternative investments before and after the Spring 2020 market crash?
Surprisingly well. ESports, gaming, shipping containers and storage units all got a boost from changes in behaviour during Covid-19. Others like life settlements and litigation funding did well because they are not related to the economy and did not fall when stock prices fell.
3. What are the pros and cons of hedge funds and alternative investments?
Alternative investments like hedge funds and exotics only work if they deliver portfolio diversification and low correlation. Many do not do so any longer. Investors should continually seek portfolio diversifiers that can do well when traditional stocks and bonds do not.
4. What are the returns, risks, and opportunities for anyone who wants to expand their investment horizon?
Investors in exotics should look for low to high double digit returns and volatility similar or less than stocks. Some are very low risk like life settlements and others are very high risk like crypto. It is best to hold a blend of several and focus on those with the lowest correlations.
5. Who do you think is going to benefit from reading this book and how?
Readers of this book will learn the basic value proposition for many types of exotics. They will be told how to get direct exposure and invest in funds and benchmark performance, and they will learn about what can go wrong and where the risk lies with these sorts of investments.
6. With the wide range of material already available for investors, what is unique that your book has to offer?
This book provides a consistent approach to many types of investments. It takes a dispassionate, analytic approach to understanding the value and potential returns and ways to invest. It is the most comprehensive and the most plainly written book on the topic available today for anyone who wants to consider adding these investments to a traditional portfolio of stocks and bonds, real estate, private equity and hedge funds.