Even though the stock market can be extremely volatile, this doesn't mean investors are not looking to invest. In fact, ‘alternative investments’ that were once extremely powerful are still promising today. In this category we exclude traditional investments like bonds, stocks and cash.
Believe it or not, in spite of the never-ending financial crisis, many people still believe in the great power of an optional investment. Financial gurus agree that it’s best to put money in this type of investment if you want to diversify your portfolio. Simply put, rather than put a lot of money in stocks and bonds, consider alternatives like private equity, fine art, hedge funds or wine.
Art
For decades, fine art has been a sensible alternative investment. That’s because price fluctuations don’t hinge on the ups and downs of conventional investments such as bonds and stocks. Throughout the 2nd half of the 20th century, general values of fine art pieces increased with an average percentage of 10.5% per year according to the Mei Moses Fine Art Index. Even though the art market and the stock market don’t increase and decrease at the same time, art has it very own shifts.
If you want to buy paintings for example, you are advised to start with a minimum investment of $10,000. Of course, you can enter the market with lower amounts of $1,000, but in this case you’re talking a huge risk. Basically, you’re buying art from unknown and undiscovered artists with the potential of becoming famous one day.
Fine wine
Fine wine investors could make steady returns of up to 15% per year in the long term. In general, prices for specific vintage wines fluctuate; however, the prices for some of the most famous and sought-after vintages and vineyards have the tendency to increase. That’s because the supply becomes limited with every that goes by. Collectors and wine aficionados are notoriously selective. They feel a constant pressure to remain on top. This means they’re always willing to invest in good-quality wine. Bordeaux (Mouton Rothschild wine for example), several types of Burgundies, California’s cult cabernets and the Spanish reds are among the top preferences of avid investors.
Coins
Average people consider that collecting coins is more like a passion or hobby, and not an investment. For the avid investor seeking for a profitable investment idea, coin collecting can render some pretty stable returns. There are 2 min types of coins you might want to think of when purchasing coinage solely for investment purposes: bullion coins – these come in gold and they’re minted by the federal government and numismatic coins – these are valued for their scarcity and not for their weight in precious metals.
As for popular coins that are seen as collectibles, we should mention: Walking Liberty half dollars, Morgan dollars, and certain types of Buffalo nickels among others. In general, the rarest coins are then most valuable, and can provide some pretty fabulous returns. In order for an investment to make money with this investment idea, it is important to find a reputable dealer.
Commodities
Commodities as an alternative investment include resources such as livestock and crops, fossil fuels (coal, oil) and precious metals (gold, copper, etc.). This market is among the most volatile, considering world events and unpredictable natural disasters that can happen any time, thus impacting prices. The safest way for an investor to make money with commodities is to benefit from increasing prices. Purchase exchange traded funds, which are better known as ETFs. The most sensible EFTs buys different commodities rather than remain focused on a single commodity. They’re not uncertain investments and an experienced investor will know exactly how valuable these can actually be.
There are plenty of alternative investment opportunities you can opt for. However, unless you have an amount of money you can live without, you are not advised to spend. These are more appropriate for wealthy people with money to spare. We’re not saying they’re risky, but they do have an increased level of unpredictability. Whether you like wine and you’ve decided to convert your hobby into a business, or you collect coins it’s really important that you get informed prior to wasting cash. The more you know the higher chances you have to see good returns.
