EP #429 - Aurelio Perucca: How to Make Money from Alternative Investments
Aug 18, 2024
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Aurelio Perucca, the co-founder and CEO of Splint Invest with a PhD in Economics, dives into the world of alternative investments. He explains how these assets can provide stability outside traditional stocks and bonds. Listeners learn about the importance of diversification and the benefits of fractional ownership, even in luxury items. Aurelio emphasizes making informed choices to avoid the opaque market pitfalls and shares insights on cash flow management while investing in niche markets. It's a compelling look at expanding investment horizons!
Alternative investments, such as real estate and collectibles, are valuable for portfolio diversification and provide stability during economic fluctuations.
Retail investors face significant challenges in accessing alternative investments, but platforms like Splint Invest aim to lower these barriers and enhance liquidity.
Deep dives
The Value of Teamwork in Startups
Working in a team is essential in the startup world as it significantly enhances decision-making and speeds up progress. The experience shared in the podcast emphasizes that collaboration leads to more successful outcomes compared to solitary efforts. Relying solely on individual judgment can make it challenging to maintain speed and quality in deliverables. Thus, building a strong team is a crucial learning for anyone embarking on a startup journey.
Understanding Alternative Investments
Alternative investments encompass asset classes outside traditional stocks and ETFs, often involving high barriers to entry, such as illiquidity and minimum investment amounts. Examples include real estate, private equity, collectibles, and luxury items like art and classic cars. The podcast explains that these investments can be appealing due to their potential for stable value, especially during market downturns. They also adapt well to inflation trends, providing a hedge against currency devaluation.
Strategic Importance of Diversification
Allocating a portion of one's portfolio to alternative investments can enhance diversification and risk management. Statistics reveal that 81% of the ultra-wealthy hold significant wealth in these assets, highlighting their relevance in wealth management strategies. While the podcast recommends a cautious approach—suggesting a maximum of 5% to 10% for retail investors—it stresses the psychological comfort that comes from having investments that do not react to market fluctuations in the same manner as stocks and cryptos. This strategy allows for a more balanced portfolio, providing a cushion against simultaneous market declines.
Barriers to Access in Alternative Investments
Retail investors often face significant barriers when trying to access alternative investments due to high minimum ticket sizes and lack of transparency in the market. The podcast discusses how building a well-diversified portfolio in a single category might require substantial capital, often making it inaccessible to the average investor. Additionally, identifying quality investment opportunities is challenging, as most desirable assets are not publicly listed. The speaker's platform, Splint Invest, aims to democratize access by allowing smaller investments while also managing the complexities involved in sourcing and verifying these alternative opportunities.
8:45 - How much to allocate to alternative investments
11:58 - Alternative investing through Splint Invest
16:10 - Choosing top quality investment opportunities
20:27 - How to sell your splints
About Aurelio Perucca:
Aurelio Perucca is the co-founder and CEO of Splint Invest, an alternative investment platform. He holds a PhD in Economics from the University of Bern and previously worked for companies like Stryker and PwC before starting Splint Invest in 2021.
Splint Invest’s mission is to make it possible for all private investors to invest in alternative assets, (almost) regardless of personal wealth. Alternative investments are all investments that are not in stocks, bonds or ETFs, i.e. investments in highly illiquid assets like real estate, crypto, collectibles and luxury items like paintings, cars and wine.
Since alternative investments have a low correlation to the global economy (meaning they perform well in recession phases, as well as during economic booms), they are a good choice to diversify your portfolio and make it more resilient. You should, however, be very careful about which alternative assets you invest in, as there is low transparency in the market. Splint Invest can help you there by doing all the due diligence work for you.