Alternative investments were once the province of the super-rich – unconventional ways of protecting wealth that would withstand everything from market turbulence to financial meltdown. Yet today, with conventional investment types offering limited returns, more and more people are discovering that alternative investments could provide the best medium-long term yield.
What Are Alternative Investments?
Alternative investments are ones that fall outside the mainstream and that, unlike stocks, shares and savings accounts, have low correlation to the overall financial market. They include things like venture capital, hedge funds, real estate investment trusts, private equity, commodities such as gold, offered by Lear Gold, and other precious metals and even collectibles such as fine art and rare wine.
Why The Attraction?
In years gone by, the average person with some savings tucked away would generally leave the money sitting in some high interest accounts or an ISA and watch with satisfaction as year on year, the numbers steadily grew. Yet today, with banks continuing to cut base rates, the value of ISAs has been slashed and anyone looking to earn interest from their funds is wondering with increased desperation where to turn.
Alternative investment can offer returns that far outweigh conventional investments. Demand is at an all-time high, and is predicted to rise further over the next five years. Yet we all know there is no such thing as a free lunch, so what’s the catch?
Is There A Downside?
Many of these investment types, particularly the more tangible ones, are illiquid, and so are seen as a long term means of protecting wealth. If you want to turn a quick dollar and have instant access to your money, then retail investing in fine wine is obviously not for you. There is also the usual question of risk versus return – gold offers high potential yields, but operates in its own volatile market, and collectibles such as coins and wine can offer excellent returns, but you have to know what you are doing or your fingers could be burned.
Thinking Outside The Box
With pension funds in crisis, interest rates at an all-time low and even the buy-to-let market now looking less attractive, it is important to look at every available opportunity to make your money work harder for you. Everyone’s circumstances are different, so take some professional impartial advice, but you could find that alternative investments are the perfect solution.
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