I'm exploring alternative investing / trading strategies for my personal portfolio and had questions regarding their viability and appropriateness as a retail investor. Here's my risk / liquidity profile:
Asset allocation: The alternative portfolio is only supposed to be ~10-15% of the total portfolio. Rest of my portfolio currently is Indian Govt bonds only (~9% yield, taking BBB credit & USD-INR FX risk). I'm also considering a more balanced approach for the rest of the portfolio, but uncertain about the impending market correction before moving into US equities.
Risk: I'm okay with annualized vol of up to 30%. To give some perspective, the average annualized S&P vol is 15%, with highs of a bit more than 25% during the crisis.
Liquidity: I'm okay locking up money for a max of 3-5 years.
I'm considering alternative strategies like algorithmic trading, real estate / Equity REITs / Mortgage REITs, buying structured products (CLO equity) or via credit ETFs, P2P lending, buying OTM puts etc. I do realize that each of those strategies require in depth expertise, but if you had a good experience at an institutional level with these products, would it make sense to diversify with these asset classes / strategies?
One clear downside apart from not knowing what's going on with these products is the increased correlation and reduced liquidity in distressed times.