In recent years we’ve seen a number of fad investments. Of these one of the biggest has been for Infrastructure funds. The market for these has grown substantially in a short period of time as many investors believe they’ve found an asset class that could be resistant to the rigours of the credit crunch. However, buyer beware. Wherever you find a bandwagon you can rest assured there’ll be a great big pot hole lurking somewhere down the road. That doesn’t mean you should avoid them, far from it, but proceed with caution and take proper advice.
So what sparked the increase use of infrastructure funds? In short it is our renewed taste for tangible assets. We believe somehow that these will hold their value under difficult market conditions and in general that has proved to be the case. Page like this provides more info.
With countries such as Brazil, India, China and Africa continuing their emergence onto the world stage that creates a number of golden opportunities in the provision of investment. These nations have substantial resources of sub standard infrastructure in desperate need of redevelopment. That has led to a surge in the amount of construction going on around the world at any one time.
That leads many experts to postulate that infrastructure funds can offer an excellent alternative asset class. However, we’ve seen other classes hyped to such an extent before and they did not always have a happy ending. Furthermore some people have been burned in this sector previously, which begs the question is this another white elephant?
In most respects the answer to that question is no. Performance may not always be as strong as the most ferocious of proponents predict, but that doesn’t mean investors should walk away. Rather it fits in extremely well as part of an overall investment portfolio.
Problems may occur when investors plunge headlong into specialised infrastructure funds. They are placing all their hopes into a sector they might not fully understand. That’s not the first time the market’s been responsible for this kind of mistake, and it won’t be the last.
However, by taking proper advice and making a few simple precautions, you can avoid being scarred in this market. There are a number of companies offering expert impartial advice on the prospect for infrastructure funds. By following their leads and making the most of their highly developed resource of expertise, investors can avoid the pit falls of blindly jumping onto a bandwagon with no idea where it’s going.