When we are asked “What are Alternative Investments?” generally we answer that it is a terminology that is utilized loosely to categorise all things not covered by traditional stocks & bonds.
In today’s tough economic climate, individuals are searching for ways to restore some of their wealth that they lost over the last number of years. Most conventional markets did not perform as well as they did previously, which caused investors to lose a large amount of money. If more people would have invested in alternative markets, they would have ended up better positioned to endure the economic storm and would not have lost as much of their money as they did.
The type of Alternative Investments that investors can incorporate into their portfolios are very broad and should be carefully analyzed before incorporating into any portfolio.
Here are some of the Alternative Investments:
- Timberland
- Storage units
- Water rights
- Fishing rights
- Airspace rights
- Mineral rights
- Municipal liens
- Film Tax Credits
- Royalties
- Airplane leasing
- Collectibles
- Wine
- Startup angel investing
- Intellectual property
- Lottery Structured settlements
- Artwork
- Websites / URLs
- Classic Antique Cars
- Coins
- Stamps
and much more.
Lots of “alternative” investments, like wine, art, classic cars, etc are astonishingly strong now and they are becoming something to focus on now more than ever since many individuals lack portfolio diversification in an environment with impending volatility.
With a shift towards technology, there is now also access to better-investing data sets and information allowing a broader set of investors deeper insight. While many investors were previously unable to participate in alternative investments due to high capital requirements, lack of information and a lack of deal flow, technology is enabling access through greater reach and scale. Technology is catalyzing a brighter future, illuminating an industry that has historically been too opaque and ushering in a new generation of alternative investment participants.
Investing in alternative markets can help improve your portfolio because these markets normally outshine standard markets during bear markets.
However, research is the key and the choice should be based on your risk appetite and after researching each option carefully, owning a home, a decent life insurance cover and a diversified regular investment portfolio with a balanced mix of debt and equity investments, to cushion yourself from life’s vagaries.
Further reading:
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