Alternative investments are uncorrelated to the traditional stock and bond markets and potentially offer enhanced investment returns and portfolio diversification. Diversifying a portfolio with non-traditional investments may help lower a portfolio’s overall risk. These investments are available by direct investment to investors meeting net worth and income standards.
REITs
Real estate investment trusts REITs allow individuals to invest in large-scale, currently income-producing real estate. A REIT is a company that owns and typically operates currently income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans. Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.
Tax Deferred Investing
Tax-deferred investing allows an investor postpone paying taxes on the money invested for a specific amount of time, based on the investment. Tax-deferred status refers to investment earnings such as interest, dividends, or capital gains that accumulate tax-free until the investor takes constructive receipt of any profits. The most common types of tax-deferred investments include individual retirement accounts (IRAs) and deferred annuities. Some examples include 1031 Exchanges, 401k and IRAs.
Conservation Easements
A conservation easement is a restrictive covenant that is a voluntary agreement that allows a landowner to limit the type or amount of development or conserve and protect natural resources on their property while retaining private ownership of the land. The conservation easement is signed by the landowner (the easement donor) and the Land Trust or Conservancy (party receiving the easement). The Land Trust or Conservancy accepts the easement with the understanding that it must enforce the terms of the easement in perpetuity. The easement is recorded with the County and runs with the land and binds all future owners of the land.
Equipment Leasing
Equipment leasing funds allow investors to pool their money with other investors to assemble a portfolio of capital equipment that can be leased to businesses, and eventually sold off or depreciated out after a particular number of leases.
Tax Credits
A tax related incentive that allows individuals or entities to deduct a certain percentage of specific investment related costs from their tax liability apart from usual allowances for depreciation.
Oil & Gas
There are tax benefits to developing an oil or gas well. This means that drilling costs—from equipment to labor—are up to 100% tax deductible. Intangible drilling costs (IDCs) include all expenses made by an operator incidental to and necessary in the drilling and preparation of wells for the production of oil and gas, such as survey work, ground clearing, drainage, wages, fuel, repairs, supplies and so on. Broadly speaking, expenditures are classified as IDCs if they have no salvage value. IDCs include all real and actual expenses except for the drilling equipment.
Other Private Placement Securities
A private placement is a non-public offering of securities exempt from full SEC registration requirements. Placements are usually made directly by the company issuing stock, but they may also be made by an underwriter. The offering may be of debt or equity.
*PJ Lynch and Emerson Equity do not provide legal or tax advice.
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All investments involve risk. Outcomes are not guaranteed.
PJL Investments and Emerson Equity LLC do not provide legal or tax advice. Securities and advisory services offered through Emerson Equity LLC, member FINRA, SIPC and a state Registered Investment Advisor. Emerson and PJL Investments are not affiliated.
1031 Risk Disclosure:
- There is no guarantee that any strategy will be successful or achieve investment objectives;
- Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
- Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
- Potential for foreclosure – All financed real estate investments have potential for foreclosure; ·Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments;
- Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
- Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits
No offer to buy or sell securities is being made. Such offers may only be made to qualified accredited investors via private placement memorandum. Risks detailed in a private placement memorandum should be carefully reviewed, understood and considered before making such an investment. Prospective strategies and products used in any tax advantaged investment planning should be reviewed independently with their tax and legal advisors. Changes to the tax code and other regulatory revisions could have a negative impact upon strategies developed and recommendations made. Past performance and/or forward looking statements are never an assurance of future results.
Many of the investments offered will be only available to those investors meeting the definition of an Accredited Investor under SEC Rule 501(A) and offered as Regulation D private placement securities via a Private Placement Memorandum (“PPM”). Prospective investors must receive, read and understand all of the risks associated with buying private placement securities. Investments are not guaranteed or FDIC insured and risks may include but are not limited to illiquidity, no guarantee of income or guarantee that all tax advantages or objectives will be met and complete loss of principal investment could occur.
Risk Disclosure: Alternative investment products, including real estate investments, notes & debentures, hedge funds and private equity, involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor’s interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-U.S. exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in U.S. markets. Additionally, alternative investments often entail commodity trading, which involves substantial risk of loss. NO OFFER OR SOLICITATION: The contents of this website: (i) do not constitute an offer of securities or a solicitation of an offer to buy of securities, and (ii) may not be relied upon in making an investment decision related to any investment offering by PJL Investments, Emerson Equity LLC, or any affiliate, or partner thereof. PJL Investments does not warrant the accuracy or completeness of the information contained herein.