There are numerous ways of investing your money, but the most common where most people like to invest are bonds, foreign exchange and shares. But these investments also considered as risky investments. You can make it less risky by checking out the past detail (portfolio) of such investment.And such details can be gathered through alternative ways. While the investment, which is made into assets that don’t fall into the category of three main asset types (cash, bonds and stock) are called alternative investment.
Alternative investment: Types:
Mostly alternative investments required high minimum capital, and in addition you can say in such alternative avenues are less synchronized. Some most common alternative investments are described in
few details as follows.
Futures: Such contracts are made for some future dates, for some sale purchase purpose of a commodity on a predetermined price by both the parties. This type of contract can be used for foreign exchange currency or maybe for the commodities such as (oil or agro products). But remember one thing perishable products are not included in Forex. You can also invest in NASDAQ futures and S&P.
Options: This type of contract is the same as futures, but the difference is the holder is under no obligation to sell or buy the underlying asset in such contract. So that the holder can let the contract expire as well.
ETFs: Exchange trade funds (ETFs) are the commodities and metallic money such as the gold and silver or oil etc. These ETFs can be traded in stock exchange at equal the net asset value (NAV).
Real estate: Such investment includes the buying and selling of immovable property such as land buildings etc. And also the rental income and investment yields are also a part of such investment.
Art: after the financial crises in 2008 in the stock markets the Art became famous as an investment.Thai’s why in now says it is also considered as an alternative investment.
Gold: it is the defensive investment which becomes so much popular in the period of prolonged economic and political upheavals.
Wine investment: If you invest in a fine wine, then you can surely get a healthy return from it. Although wine is not considered good from 2007-2008, but in nowadays it is an alternative investment.
Benefits of alternative investments:
• Less risky
• Gives you good profit generating opportunities
• Diversify an investor’s profit
Limitations of alternative investment:
• As compare to cash, bonds and stocks these investments has less liquidity.
• These investments have more fee structure as compare to the stock and bonds.
• Specific expertise required in such investments, so that their fee is also an issue.