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Do you have the Right Mindset for Investing in Alternative Assets?

Last week, I began the CalTier series with “Are Alternative Assets right for your portfolio?” with the premise that alternatives are misunderstood by the average investor. Rightly or wrongly, they may feel a little hesitant because of potential risks, illiquidity, or lack of access or understanding.

This week’s article is going to address a more basic fundamental, yet perhaps the biggest challenge for both the investor as well as the advisor, which is mindset.

In my 30+ years of working with investors, I have learned that most, if not all, investment decisions are made emotionally, not logically. Early on, I remember presenting the new Merrill Lynch Stock of the Week, Johnson & Johnson, then at a price of $40, with a new 12 month target of $60, as a great investment, only to be told “Let me think about it”.

It wasn’t until my manager suggested explaining to that client that 1,000 shares would potentially pay for his daughter’s first year of college that he bought 2,000 shares.

The Bud Fox comments aside, the investor mindset can determine the difference between building a successful and tax efficient nest egg versus one beset with nail biting anxiety and frustration.

We are all driven by a mindset.

Our investing mindset is simply a collection of thoughts and beliefs (acquired over time) that shape our investing habits and actions. It dictates how we perceive and approach the market and consequently, determines the kind of result we attain.

We have all taken “flyers” that either hit or we paid the price. Forget hedging with gold or commodities and losing. Anyone remember the Iraqi Dinar in 2010 – 2012, when every US $1 Dollar invested would turn into US $1,000 Dollars after the Iraqi Government would restructure its financial system? I had one frantic woman asking if she could put $100 on her SEARS charge card to pay for her investment.

It begins with the premise that “most people would rather avoid pain than enjoy pleasure”.

Crazy right?

All one has to do is make an investment into something that they didn’t know or understand but were convinced was a “sure thing” to make them rich overnight, and lose it all.

This mindset becomes self-reinforcing and sabotaging, blaming the Advisor, the markets, and/or the asset class.

So where do we go from here?

Well, if the average High Net Worth Investor has only a 22% Portfolio Allocation in Public Markets (stocks, bonds, Mutual Funds and ETF’s) and the rest in some kind of Alternative Asset (like real estate), perhaps we need to do our homework and learn, get good advice from Advisors, join Investing Clubs and get ongoing Investor Education like at

First, however, let’s think about having the right mindset. Let’s start by believing that we are in control of what goes on in our life and financial situation, and we are responsible for those choices and results.

One must believe they can do something about their financial situation by committing to goals and developing a plan. In working with High-Net-worth Investors and very successful people over the last 30 years, the common denominator is the belief that they can manifest financial success.

Manifesting involves turning thoughts, goals and dreams into reality by visualizing these things and having them materialized based on the law of attraction. What I originally thought might just be “hocus pocus”, after many years studying and applying these principles has proven that the right mindset applies to all areas of our lives.

Next week we will talk about how Alternative Assets can be applied and perhaps save what many experts are calling for the death of the 60/40 Principle.


Senior Vice President


About CalTier

CalTier is a FinTech company changing the way people around the world invest into real estate and other alternative asset classes. CalTier’s Fund is focused on bringing institutional-grade multi-family real estate investments to the everyday investor and removing the complicated barriers that have existed for years.

We believe that everyone should have access to these types of investments regardless of wealth level, experience, skill or location. Our first fund currently has 8 assets totaling 1,200 doors and is growing. Anyone over the age of 18 can invest starting with as little as $500 directly from your computer, tablet, or smartphone.

Together with Alto IRA, we also offer the “no-cost” self-directed IRA, which provides a tax-efficient mechanism for investing into real estate and other alternative asset classes. Read more about that here

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