There are more opportunities than ever before in alternative investing and education is of paramount importance in this arena. JP Dahdah, CEO of Vantage Self-Directed Retirement Plans, says they always stress the importance of financial literacy. As an investor, there’s always a level of education that’s required before you have the confidence to place dollars in any type of investment. Dahdah also believes that in the advisory world, there are thousands of investment advisors with vast experience and knowledge.
Years ago, an advisor may have put 5% of a client’s overall portfolio into alternative investments and that number has increased to about 20% today. There is still a level of education that advisors need to go thru, Dahdah says, to understand how alternative investments can play a role in an overall portfolio. He also believes the definition of alternative investments is changing. Before, hedge funds and private equity were equated with alternative investing and today, real estate is now considered alternative investing. The fact that you can say real estate is a direct investment into an alternative shows how we’ve all been raised into believing that anything outside of the stock market is alternative. Companies like Vantage are producing a lot of education for the market so there’s more comfort and less of a myth as it relates to investing in these asset classes.
Dahdah believes that historically, alternative investing has gotten a bad rap in that they’re very risky because they’re not regulated. However, anyone who has actually invested in an alternative asset understands that you’re actually a lot closer to the dealmakers and that you have the “value of a handshake” many times. You have access to information that you can analyze, he adds. Using real estate as an example, you can actually drive by the property, identify who the tenants will be and get a broader amount of information that will have a direct impact on the rate of return. From the client’s perspective, this is a tremendous benefit and it’s viewed as a safer way of investing because they feel more comfortable, as they have direct access to the information, Dahdah explains.
This is a very exciting time for alternative investments, believes Dahdah and in five years from now, he sees a completely different way of buying these assets, with digital being the way of the future. He sees the many different levels of a real estate transaction becoming as seamless as clicking a button in ten years. With the popularity of E-signatures, he already sees this happening. As well, the shopping experience with these portals will make the access to opportunities and deals that much easier, even from the comfort of your own home. “This is the genesis of a huge shift in the financial industry,” Dahdah says.
JP Dahdah is the CEO at Vantage Self-Directed Retirement Plans and spoke with Alternative Investing News providing online alternative investing video news content. Alternative Investing News is a featured network of Sequence Media Group. This video was brought to you by Vantage Self-Directed Retirement Plans.