QUESTION: Alternative investments: what are the risks of alternative instruments?

Investments in gold, commodities, REITs, and venture projects inherently carry certain risks that differ significantly from the risks of the traditional stock market. In order to minimize potential losses and protect your capital, you need to calculate in advance not only the baseline scenario, but also a severe stress scenario. This approach allows you to pre-evaluate the potential drawdown of non-standard assets during crises in the commodity or venture markets.

A mandatory element of risk management is the creation of a financial safety net and building in an additional margin of safety equal to 10–20% of the planned investment volume. Furthermore, even before making a transaction, you should decide in advance which expenses or regular contributions you will cut first in the event of deteriorating market conditions. This will protect you from panic-selling alternative assets at an unfavorable price at the most inopportune moment.