Discussion Assignment Example | Topics and Well Written Essays - 500 words - 16

Discussion - Assignment ExampleReal asset lower risks of portfolio and is able to guarantee purify returns in the future.Real asset provide variegation opportunity in enthronisation. According to (Brigham & Houston, 2001) the value devoted to literal asset is a bit stable putting it in the investment portfolio along with shares diversification on the portfolio is achieved. This help in case the value of shares dwindles then one is able to still bring returns from the real assets.The cost of maintaining real assets makes it expensive. The real asset needs to have an insurance cover against workable risks. This additional expense makes it too expensive to invest in as compared to bonds and share they dont have such additional expenses.The unit cost of any real asset is expensive consequently limiting the number of people who can invest in these assets. Unit cost of share is usually lower and a good number of people can afford to invest in them.This signifier of investment is different from the common traditional way of investment i.e. cash, bonds and shares (Hirt & Block, 2012). This form of investment includes hedge fund, real estate, private equity, exchange funds and managed futures. This form of investment doesnt have a fixed-income. choice investment is less transparent and complex this feature makes it difficult to less trained investors because of its complexity in restrictions.Alternative investment has the capability to improve the risk and return trade-off. The low correlation between the alternative investment and the conservative known form of investment enhances the diversification of the portfolio thus reducing the risk associated.Another indication that makes alternative investment be able to diversify the portfolio to reduce risks is the ability to be more pliant enabling an investor to invest in a set of opportunity that can give better returns. occult equity is a form of