You Have The Advantage...

By Roger Nusbaum | August 13, 2008 | 12:42 PM | 0 Comments

...if you have the time.

Over the years I have sought out various alternative  assets to both write about and incorporate into the accounts I manage. The idea is simple; by allocating to disparate asset classes, with appropriate proportions, there is a good chance of achieving a better, long term risk adjusted result.

In the past, on my blog and for theStreet.com, I have written about absolute return funds, Canadian trusts that pay income from hydro electricity generation and foreign farmland stocks among others. 

All of these vehicles have their pluses and minuses and have had different results in offsetting the bear market decline of the S&P 500. Looking out over the long term there is visibility for capital to flow into these areas (not to say picking the best ones will be easy) in the future, talking big macro themes, so it makes sense to learn more about these areas and allocate in the future.

Where the individual investor has the advantage is with liquidity and the ability to get in or out of some of these stocks. Over the last couple of weeks I had been trying to buy a foreign farmland stock and while the order was not that big it was too big.

A do-it-yourselfer looking to add 2% into some sort of foreign stock from the alternative asset space would have a much easier time moving $5000-$20,000 into or out of a name than some much larger number.

While that is good stuff the work involved could be monumental, I think it takes more to understand an Indonesian rubber plantation than Kraft Food (NYSE: KFT). I think the dynamics of the country, region, specific market dealt in need to be understood in addition to the company itself.

For most folks I believe this is a function of time more than anything else and so may not be accessible but those who do have the time and the inclination can have success here.