Mar 9, 2012

Posted by in Penny Stock | 0 Comments

The Variety Of Alternative Investments

What Are Alternative Investments?

alternative investmentsAlternative investments are not just unusual stocks, bonds or cash. All of those options are included within the realm of normal investments. Alternative investment signifies having a stake in something that is not as easily quantified as an equity. However, it is a loose term which has a wider significance for different people.

Some types of alternative investment will not seem so unusual to most people.  Hedge funds are an alternative type of investment of which most people have heard even if they do not understand it. Some people consider real estate among the alternative investments while others think of land as very traditional and leagued with stocks.

Perhaps the easiest way to define these investments is through their irregular ability to pay back their investor. That is why things such as precious metals are included among the alternative forms of investment. This also includes a variety of financial derivatives.

A second category of alternative investment includes tangible goods. Precious metals are among these because many such investors actually purchase solid quantities of these metals and secure them in safe deposit boxes and warehouses. However, these tangible goods can include more complex assets, such as coin collections or stamp collections. Other alternative investors buy antiques, wine or pieces of art. These items have a sale value but this value is based on fundamentals which are hard to identify. When you buy a stock, you can point to a mountain of economic data to justify the price of your purchase. With an art collection, it is really a vague public opinion that might be responsible for its million-dollar price tag.

The last category of alternative investment is the riskiest. These are cash investments in productions and dreams. You can include venture capital among these alternative investments. The possible return on these investments is very hard to define and may sometimes come out to nothing. Many wealthy investors put money into films or unfinished works of art with very little promise for a return on the investment.

Which Alternative Investments Are Right For You?

Determining which alternative investment is right for you depends on your interests and your strengths. Many people have spare money to invest and do not want to sink any more money into safe stocks. They look to their hobbies, their pastimes and their personal interest to find a pet project.

Find more information on alternative investments on the FREE email list:

Comments are closed.