Alternative Investments

Capital Assets, Assets as economic inputs, Assets as a store of value

Capital assets are defined by their claim of the future cash flows of an enterprise. (Hedge Funds, Private equity funds, credit derivatives, and corporate governance funds.

Assets can be consumed as part of the production cycle. (Physical commodities) Can not be valued using the NPV method.

Examples: Art, Gold and precious metals. Value is subjective.

Equity, Fised Income, Cash, Real Estate

Investing against a benchmark. Same weights as the index.

Concerned with long-termm asset mix to acomplish a long term goal such as funding pernsion benefits.

Short-term in nature. Take advantage Of current market conditions.