{"id":5210,"date":"2022-01-01T12:44:09","date_gmt":"2022-01-01T07:14:09","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=5210"},"modified":"2022-01-01T12:55:51","modified_gmt":"2022-01-01T07:25:51","slug":"be-careful-with-alternative-investment-funds-outside-india","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/be-careful-with-alternative-investment-funds-outside-india\/","title":{"rendered":"Be Careful With Alternative Investment Funds Outside India","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"

A lot of alternative investment funds that operate and are located outside India require a very low entry capital – $1,000 or less.<\/p>\n

Setting an entry-level price so low is a strategy for luring retail investors who often don’t do their research and assessment.<\/p>\n

Typically, a Hedge Fund is only allowed to take money from institutional investors or High-Net-Worth individuals. We are talking about $1,000,000 or more.<\/p>\n

However, certain rules and regulations don’t apply to AIFs, which allow them to take money from anyone.<\/p>\n

There are some pros and cons of these AIFs.<\/p>\n

Pros are – you might get an equity-beating return in the long run.<\/p>\n

Cons are – your chances of losing money are much higher. You have no control over the assets. You pay a lot of fees (20% is a lot).<\/p>\n

Should you invest in these AIFs?<\/strong><\/p>\n

Understand three critical points about typical alternative investment funds. Primarily while investing in one located and operating outside India.<\/p>\n

    \n
  1. Highly illiquid<\/li>\n
  2. Consider mutual funds<\/a> as bonds compared to AIFs – that\u00a0risky<\/em><\/li>\n
  3. Very complex, expensive to get in and out, and high fees<\/li>\n<\/ol>\n

    This is the scene for Alternative Investment Funds available for Indians.<\/p>\n

    However, this changes dramatically in the U.S.<\/p>\n

    AIFs are a great way to diversify, and people often invest in these funds to generate passive income, save tax<\/a> and opt for safe yields, compared to the stock market.<\/p>\n

    This isn’t the case in India. It’s all about investing in risky assets and taking short to mid-term bets on trendy assets.<\/p>\n

    So make no mistake about it – AIFs for any average Joe in India is a way to lose money. Probably more than what you’d lose in the stock market.<\/p>\n

    There are a couple of AIF hedge funds that allow $1,000 investment. But are you sure this is the best thing you can invest in with $1,000?<\/p>\n

    One of the principles I live by is this:<\/p>\n

    Before deploying your capital to buy an asset, ask yourself – Is this asset the best my money can buy right now?\u00a0<\/em><\/p><\/blockquote>\n

    If the answer is yes, go for it.<\/p>\n

    If it’s a no, you need to find something better. It’s perfectly fine to sit on cash until you get to that point.<\/p>\n

    To give you a little context,<\/p>\n

    I haven’t increased my positions in any stock since February 2021. The only time I did, I bought Sona Comstar for under 490. I assess my money now<\/em> can’t buy anything worth holding onto for the next five years. I’ll have to be anxious, check my holding every week or so, and it’s something I do not wish to do.<\/p>\n

    I’m sitting on cash for as long as I can’t increase my posting at valuations that make sense. I certainly can’t enter Infosys at 730, but 1450 would make a lot of sense.<\/p>\n

    Let me know what you think about investing in AIFs in or outside India.\u00a0<\/em><\/p>\n\"\"","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"

    A lot of alternative investment funds that operate and are located outside India require a very low entry capital – $1,000 or less. Setting an entry-level price so low is a strategy for luring retail investors who often don’t do their research and assessment. Typically, a Hedge Fund is only allowed to take money from …<\/p>\n\"\"","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":5297,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[177,178,179],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/Be-Careful-With-Alternative-Investment-Funds-Outside-India.png","acf":[],"yoast_head":"\nBe Careful With Alternative Investment Funds Outside India<\/title>\n<meta name=\"description\" content=\"Thinking of investing in AIF Hedge Funds situated outside India with $1,000? Here's something you need to know\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aayushbhaskar.com\/be-careful-with-alternative-investment-funds-outside-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Be Careful With Alternative Investment Funds Outside India\" \/>\n<meta property=\"og:description\" content=\"Thinking of investing in AIF Hedge Funds situated outside India with $1,000? Here's something you need to know\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aayushbhaskar.com\/be-careful-with-alternative-investment-funds-outside-india\/\" \/>\n<meta property=\"og:site_name\" content=\"Aayush Bhaskar\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-01T07:14:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-01T07:25:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/01\/Be-Careful-With-Alternative-Investment-Funds-Outside-India.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@AforBhaskar\" \/>\n<meta name=\"twitter:site\" content=\"@AforBhaskar\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"3 minutes\">\n<!-- \/ Yoast SEO Premium plugin. -->","gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/5210"}],"collection":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/comments?post=5210"}],"version-history":[{"count":0,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/5210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media\/5297"}],"wp:attachment":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media?parent=5210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/categories?post=5210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/tags?post=5210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}