In this episode, Ryan Burklo and Alex Collins discuss alternative investments and whether or not they are suitable for individual investors. They define alternative investments as those that do not fall into traditional categories like stocks, bonds, and cash. The hosts explain the concepts of correlation and standard deviation and how they relate to risk and diversification. They emphasize the importance of having a solid financial foundation, including an emergency fund, income protection, and liquidity, before considering alternative investments. The episode concludes with a reminder to prioritize balance sheet management before making investment choices.

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Takeaways

Alternative investments are investment vehicles that do not fall into traditional categories like stocks, bonds, and cash. Understanding correlation and standard deviation is crucial for assessing the risk and diversification potential of alternative investments. Before investing in alternative investments, it is important to have a solid financial foundation, including an emergency fund, income protection, and liquidity. Net worth and accredited investor status may impact access to certain alternative investments.

Chapters

00:00 Introduction and Beer of the Day 00:36 Definition of Alternative Investments 04:07 Correlation and Standard Deviation 05:26 Benefits of Negative Correlation 07:10 Understanding Risk and Standard Deviation 09:18 Considerations Before Investing in Alternative Investments 10:25 Importance of Emergency Fund 11:10 Protection of Income 12:01 Liquidity and Access to Money 13:48 Net Worth and Accredited Investor Status 15:06 Alternative Investments and Balance Sheet 21:42 Access to Alternative Investments 23:33 Question of the Day and Conclusion