Tutorial: Get More Out of Your Account Statement
E.K. Riley offers the highest attainable level of professional services in support of all your brokerage needs. Our brokerage services include access to an extensive array of investment alternatives to help fuel portfolio growth and diversification.
Alternative Investments
Through our correspondent relationship with Wells Fargo Advisors, E.K. Riley can provide brokers, financial advisors and their clients with access to a variety of alternative investments. These instruments offer opportunities to meet various portfolio requirements, depending on individual client objectives and preferences.
The potential advantages offered by alternative investments include enhanced portfolio diversification, access to investment strategies or managers not otherwise available to individual investors, and reduced exposure to market risk.
Two examples of alternative investment vehicles include hedge funds and 1031 exchanges.
Hedge Fund Investments
Hedge funds are professionally managed and represent money pooled from numerous investors. Hedge funds differ in that they are unregulated and as such, have much greater flexibility in pursuing various investment strategies.
Hedge funds are designed to offer more sophisticated, accredited investors the opportunity to achieve positive returns in all market conditions while reducing volatility and preserving capital. Hedge funds often employ various financial instruments in an effort to deliver non-correlated market returns.
There are over a dozen different strategies employed by hedge fund managers, including Convertible Arbitrage, Long/Short, Fixed Income Arbitrage, Emerging Markets, Short Bias, Multi-Strategy, Global Equity, and Market Neutral. Investors should discuss these strategies with their financial adviser to determine the strategy (or strategies) that make the most sense for the investor.
1031 Exchange Services
Anyone who has sold an appreciated piece of real estate is acutely aware of the difficulty in deferring capital gains taxes. 1031 exchanges can come to the rescue but they require planning and flexibility.
A 1031 exchange can allow investors to exchange one property for another larger or more desirable property. Typically, the exchange involves property other than the owner’s primary residence that has appreciated or is no longer generating sufficient cashflow to be exchanged for a comparable (like-kind) property producing better income. Using a qualified intermediary, investment or property owners can defer capital gains by reinvesting sale proceeds into a replacement property. Capital gains taxes on the relinquished property are deferred until the replacement property is sold, enhancing cashflow. Consolidation or diversification of business or investment property is achieved and the owner may receive interest on sale proceeds until the new purchase is completed.
One form of a 1031 exchange is the Tenants-In-Common (TIC) structure. TIC’s can provide long-term income while avoiding the problems of active property management. They offer smaller or individual investors a means of purchasing interests in larger properties, often anchored by developers, retailers or corporations.
Both 1031 exchanges and TIC structures are complex transactions with requirements that must be exactly followed to avoid losing the tax benefits. Your E.K. Riley advisor is an excellent resource to help you take advantage of 1031 transactions safely and effectively.