QUESTION: Alternative investments: how to allocate the share of alternatives in a portfolio?

Determining the optimal share of alternative investments in an overall portfolio is a delicate process that requires a balance between return and risk. When it comes to gold, commodities, real estate funds, and venture investments, it is crucial to avoid common extremes, such as excessive capital concentration in a single risky sector. You should not inflate financial expectations from venture projects or commodity funds, keeping their high volatility in mind.

When building your portfolio, make sure to leave enough funds for a comfortable lifestyle and unforeseen expenses, rather than investing your last money into illiquid assets. Track your investment progress using small checkpoints—for example, checking the balance of traditional and alternative instrument shares once a quarter. This approach will allow you to timely rebalance your portfolio and keep the risk level within acceptable limits for you.