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More sophisticated investors understand that investments actually have many dimensions.
For example, Ive seen plenty of high-return, low-risk investments that require a $50,000 minimum investment.
Ive also seen many with no liquidity and a five-year time commitment.
Start thinking more multidimensionally about investing, as you explore these investments that sometimes offer asymmetric returns.
Commodities like oil and gas can serve as an excellent hedge against inflation.
They have intrinsic value and buyers pay that value regardless of the currency denomination.
Of course, fossil fuels dont align with many investors personal values.
That dimension deters many investors, despite the potential for high returns and lower risk.
Graham has seen those high returns firsthand.
Distressed Real Estate
Austin Glanzer, owner ofNoble House Buyers, buys properties from distressed homeowners.
Mathematically, the returns are high and the risk is low.
But again, these investments come with other dimensions beyondrisk and return.
Buying distressed investment properties requires a high minimum investment and high skill.
Most real estate investors who operate at this level do so as their full-time business.
For example, say an investment club invests in aprivate equity real estate fundthat runs a land flipping business.
Theresno construction riskin raw land, no property management risk, no risk of tenant defaults.
The fund doesnt use debt, so theres no risk of rising interest rates ballooning their expenses.
The greatest risk is that a deep recession hits and the demand for land eases up temporarily.
And they pay their investors 16% annualized distributions every quarter.
Real Estate Syndications
Funds arent the only way to invest passively in real estate.
Because most investors dont understand them.
As you might imagine, my interest payments arrive like clockwork on the first of each month.
Notes are not the only way to invest in private credit.
you’re free to also invest in debt funds and other credit investments.
They also offer fixed income and a low correlation to public markets.
And, of course, they come with other dimensions that dont suit many investors.
Often these investments have no liquidity, requiring investors to leave their money tied up for a fixed period.
Some require a high minimum investment as well.
What are your priorities as an investor?
Plenty of investments offer high returns andlow or moderate risk.
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