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For investors interested in the nontraditional, there are options available and those options have perks. And these days, investors are interested. Alternative investments are a growing trend in investing, in part because of shifting economic trends and market uncertainty.

According to a Connection Capital survey, 87% of private investors are planning to maintain or increase their allocations to alternative assets over the next 12 months. And they are not alone. Oppenheimer said in a July 2020 report that, “asset growth among alternative strategies has been powerful as assets have tripled to $9.5 trillion over the past decade and they’re expected to grow to $14 trillion by 2023.”

On the whole, geo-political risks have traditionally had more impact on bonds, equities, and mainstream commodities like oil rather than alternative investments like fine wines, watches, or digital currencies, according to a report published by Nasdaq. So, in a world where it feels like geopolitical uncertainty outweighs geopolitical stability, it’s no surprise that investors are more regularly looking to alternative investments for diversification and market outperformance. 

Case in point: the alternative investment of cryptocurrencies. Considered a digital asset rather than a real currency, cryptocurrency is breaking records. In the first few days of 2021, for example, Bitcoin topped $39,000 which helped to push the total value of the cryptocurrency market in its entirety to more than $1 trillion. 

Here’s what all investors should know about alternative investments on the heels of 2020. 

What Are Alternative Investments?

Alternative investments are generally those that fall outside of the typical variety of stocks, bonds, mutual funds and ETFs (exchange-traded funds). They range from venture capital and hedge funds, to private equity funds, precious metals, collectibles, art, wine and beyond. 

Private equity involves investing in private companies outside of the public stock market. This type of investing is typically reserved for accredited investors and institutional investment firms. (Accredited investors are high-income earners, with an income exceeding $200,000 individually or a joint income exceeding $300,000 for the last two years. Accredited investors have a net worth in excess of $1 million.) 

Private equity investing involves increased risk, long lock-ups and the potential for higher returns. Typically, investor money is pooled with that from other investors and used to fund private equity instruments such as buyouts. Private equity investments are long-term, with investor money often held in the fund for as long as 10 years. The money becomes available again after a sale of holdings, initial public offering, or merger. 

Venture capital involves supporting new companies as they work to commercialize their innovations. Venture capital involves higher risk, but greater return than more traditional investing. Like with private equity, the funds are “locked until a liquidity event,” such as an acquisition or IPO. Money is collected from limited partner investors in increments as needed and are referred to “capital calls.”  

Another type of alternative investing, hedge funds, typically trade on the public markets but employ short-selling, leverage and other strategies that most investors don’t have access to. Hedge funds are also typically limited to high-net-worth individuals and entities that are designated as accredited investors or qualified purchasers.

Other alternative investments are more out-of-the-box and include farmland, art, wine, real estate, precious metals, cryptocurrency, collectibles, mineral rights, and beyond. 

Why Invest in Alternatives?

Alternative investments “boost returns, generate income, provide diversification from traditional investments and achieve their goals,” according to BlackRock. These investments offer lots of opportunities and advantages, especially as part of a long-term strategy and particularly in a COVID impacted market. 

Because alternative investments don’t correlate with the stock market, they can help to limit volatility. In many cases, alternative investments can even offer a higher return, especially with markets in flux. Higher returns are possible in part because alternative investments have additional tools that traditional securities don’t, such as leverage, derivatives and short selling, according to Oppenheimer. 

Alternative investments offer other benefits including a greater sense of anonymity, flexibility, protection against inflation and market crash, and an opportunity for investors to use and finesse expertise about specific investments (precious metals, for example). 

Alternative assets aren’t for everybody. Many are limited to high-net worth individuals. Others require some level of expertise, or at least interest and willingness to learn. (After all, if you plan to build a collection of fine wines, you should probably enjoy wine.) 

Nevertheless, alternative investments can be an excellent complement to traditional investments in a diversified portfolio.

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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


solar energy

Solar Energy Test

As the 2010s drew to a close, a report published by the World Meteorological Association (WMO) issued the following stark assessment of the current global climate situation: “The year 2019 concludes a decade of exceptional global heat, retreating ice and record sea levels driven by greenhouse gases from human activities. Average temperatures for the five-year (2015-2019) and ten-year (2010-2019) periods are almost certain to be the highest on record. 2019 is on course to be the second or third warmest year on record.” 

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The report outlines the increasingly frightening consequences of global climate change, including warming ocean temperatures, deepening droughts, and sweltering heatwaves. 

WMO Secretary-General Petteri Taalas summed up the gravity of the situation: “If we do not take urgent climate action now, then we are heading for a temperature increase of more than 3°C by the end of the century, with ever more harmful impacts on human well-being.”

Urgent climate action involves moving away from fossil fuels and toward renewable energy. This transition has been underway for years, and though there are positive signs that things are perhaps beginning to move in the right direction (global carbon emissions are growing at a slower pace, for instance), it has not been enough to adequately address the overall increase in global energy demand. 

According to the Executive Summary of the UN’s recently published Emissions Gap Report 2019, “The summary findings are bleak. Countries collectively failed to stop the growth in global GHG emissions, meaning that deeper and faster cuts are now required.” 

In order to achieve these critical emission cuts, renewable energy will need to replace fossil fuels as humanity’s primary energy source in the coming decade. One sector that has already made remarkable progress on this front, and that is poised for even greater progress in the coming decade, is that of solar energy. 

Solar energy has become a serious global energy contender over the past decade as solar technology has become more efficient and affordable. According to the UN, global solar capacity increased from 25 gigawatts in 2009 to 663 gigawatts in 2019. This increase in installed capacity was greater than any other generation technology, fossil fuel or otherwise, yet solar energy still has tremendous room for growth. 

In the U.S., for instance, solar energy accounted for only 1.6% of the total electricity budget in 2018, and all renewable energy sources combined accounted for 17% of the total. As policymakers and the public come to terms with the fact that rapid and dramatic cuts to carbon emissions need to be made to lessen the blow of climate change’s fury, the solar energy sector is extremely well-positioned to play a critical role in meeting the energy demand as renewable energy replaces fossil fuels.

For those interested in the investment potential of this rapidly-growing sector, there are a few important points to understand.

What is Solar Energy?

Solar energy is energy that is generated from the sun and converted into thermal or electrical energy

There are three primary ways to generate solar energy: photovoltaics, solar thermal, and concentrated solar power. 

  • Photovoltaics directly convert sunlight into electricity by harnessing the electrical current produced when semiconducting materials are exposed to sunlight. Solar panels on the roof of a home or in an array on a satellite are examples of photovoltaics. 
  • Solar thermal technology works by absorbing heat from sunlight and using it to warm air, water, or other materials. A roof-mounted solar water heater is an example of solar thermal technology. 
  • Concentrated solar power works by using mirrors spread over a large area to concentrate the sun’s rays to one small point in which water is heated to steam to drive a turbine. If you fly from Las Vegas to Los Angeles and look out your window as you head southwest, you will likely spot the intense glow of the Ivanpah Solar Power Facility in the desert below you. The facility is one of the largest of its kind in the world, and according to the facility’s owner, BrightSource Energy, “the electricity generated by all three plants is enough to serve more than 140,000 homes in California during the peak hours of the day.”

Why Invest in Solar Energy?

The most compelling reason to invest in the solar energy sector comes down to the simple fact that renewable energy is actively replacing fossil fuels as the dominant global energy source. This replacement is likely to accelerate as energy demand increases and as the public demands a faster transition and a more significant commitment to clean energy. 

Solar is well-positioned to capitalize on the rapidly-changing energy landscape because the sector has undergone incredible innovation in recent years. 

One recent breakthrough in material science, for instance, boosted the maximum efficiency of a photovoltaic solar cell from 29% to 35%

Another breakthrough is the development of perovskite, a synthetically manufactured material that is more efficient and cheaper to produce than the silicon in traditional solar cells. Another key reason solar energy is well-positioned for the coming changes in the energy market is cost-competitiveness. 

According to a November 2019 piece in Bloomberg: “The levelized cost of any particular energy technology is the break-even price that companies investing in that technology need in order to see a competitive rate of return. In the case of both utility-scale solar and onshore wind power, this rate has dropped to about $40 per megawatt hour — which is lower than the cost of building new power plants that burn natural gas or coal. It’s even close to being competitive with the marginal costs of running the coal and nuclear plants we already have.”

According to market analysis by the International Energy Agency, global renewable energy capacity is expected to grow by 50% between 2019 and 2024, with solar photovoltaics accounting for almost 60% of the total expected growth. Private and public investments in solar energy are rapidly increasing, and the sector’s cost-competitiveness, combined with increased efficiency and the urgency of combating climate change, make solar energy a smart investment for the future.

How to Invest in Solar Energy

Given the volatility of the energy sector, however, investing directly in solar energy-related companies can be risky. A search on Magnifi suggests that there are a number of different ways for investors to get involved in solar without opening up their portfolios to undo concentrated risk in this new and growing sector.

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This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.



Magnifi Names Broadridge Executive as Chief Product Officer

Investment in talent comes on the heels of stellar market adoption since launch earlier this year

BOULDER, Colo., November 17th, 2020 -  Magnifi, a TIFIN Group company, and the world's first natural-language powered investment marketplace today announced the appointment of Broadridge Financial veteran, Tom Van Horn, to serve as the company's first Chief Product Officer. Tom brings deep experience from leading various technology and innovation roles within the financial services industry and will lead the evolution of Magnifi’s platform through its next stage of growth.  

Tom Van Horn
Tom Van Horn, Chief Product Officer

On-trend with tenured executives departing financial services and technology incumbents to lead innovative FinTech start-ups, Tom’s arrival at Magnifi coincides with high-velocity market adoption.  As of November 1st,  2020, Magnifi’s retail and professional users influence over $320B in Assets with over 150K users actively searching for investments on Magnifi.  Founded by Dr. Vinay Nair, Chairman of The TIFIN group and a serial FinTech entrepreneur,  Magnifi launched early in 2020 and has since been featured on national broadcast and financial trade media. Andrew Ross Sorkin of CNBC Squawk Box called Magnifi “The Google for Investments: The start-up changing the way investors access investment ideas.”

“Magnifi is unlike anything I have seen in the wealth and asset management industry during my career in FinTech,” said Van Horn. “With its foundational elements of patented natural language recognition and robust investment intelligence, the platform breaks down the opaqueness of investment products and makes them more accessible for individual and professional investors.  I could not be more energized to engrain myself with such a talented group of professionals changing the investment marketplace as we know it.”

Van Horn brings almost 20 years of experience across different product, technology, and executive roles to Magnifi. He was most recently Vice President of Product Management at Broadridge Financial where he led product growth, innovation, and execution for Broadridge’s wealth management segment.  In this role, Tom has built a track record of innovation and product execution across the largest North American wealth management firms and Broker-Dealers ranging from front to back-office wealth management solutions.  Prior to his role with Broadridge Tom was Senior Vice President of Operations with leading portfolio management company FinFolio and Chief Compliance Officer/Director of Operations for a leading wealth management RIA firm in Denver, Colorado.

“We are delighted to have Tom join Magnifi’s leadership team. When top industry talent like Tom decides to come on board, it is a wonderful validation of our traction and potential ” said Rick Hurwitz, Chief Executive Officer of Magnifi. "With Tom’s deep industry roots and track record of shaping successful products, we are well-positioned to enhance the Magnifi platform to best serve our clients.” 

About Magnifi

Magnifi is a financial search platform that is changing the way people shop for investments. The world's first semantic search engine for finance, the platform helps financial advisors, portfolio managers, and everyday investors find, compare, and act on investment options. In an era with thousands of ETFs, mutual funds, stocks, and model portfolios to choose from, Magnifi demystifies and simplifies investing, providing insights and information that save time and help investors make smarter decisions. Learn more at www.magnifi.com

About the TIFIN Group

The TIFIN Group is a FinTech studio that starts and operates companies focused on shaping the future of investor experience to create better outcomes for investors. TIFIN companies combine the power of modern technology, investment science, and behavioral design to advance themes of interest to investment managers, advisors, and investors.

For media inquiries, please contact:

Niharika Shah
Chief Marketing Officer
The TIFIN Group
niharika@tifin.com


FINSUM + Magnifi: Why the Senate May Not Even Try to Confirm a New Justice

(September 2020)

Since Ruth Bader Ginsburg’s death over the weekend, the news cycle has been intensely focused on Republican efforts to nominate and confirm a new justice. A lot of attention has been paid as to the exact number of supporters in the Senate as a way of deciphering whether a confirmation can be achieved ahead of the election. However, one fact that is not being discussed much is the reality that many in the Senate don’t even want to try to confirm a justice ahead of the election. The reason why is that while confirming a new conservative justice would be advantageous for them in the long run, holding a confirmation process now could have severe repercussions in the upcoming election. Many embattled Republican senators in tight Senate races could be significantly wounded by confirming a new justice now, meaning that the Republicans could risk losing control of the Senate if they press ahead with a confirmation so close to the election.
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