{"id":6773,"date":"2025-01-29T10:49:21","date_gmt":"2025-01-29T08:49:21","guid":{"rendered":"https:\/\/moneyhub.ee\/?p=6773"},"modified":"2025-02-04T12:20:59","modified_gmt":"2025-02-04T10:20:59","slug":"alternative-investments-investors","status":"publish","type":"post","link":"https:\/\/moneyhub.ee\/en\/useful\/articles\/alternative-investments-investors\/","title":{"rendered":"18 alternative investments investors should consider"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"6773\" class=\"elementor elementor-6773\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1fb941a2 e-flex e-con-boxed e-con e-parent\" data-id=\"1fb941a2\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-54bbb305 elementor-widget elementor-widget-shortcode\" data-id=\"54bbb305\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\"><nav aria-label=\"breadcrumbs\" class=\"rank-math-breadcrumb\"><p><\/p><\/nav><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-4cbdb361 e-flex e-con-boxed e-con e-parent\" data-id=\"4cbdb361\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t<div class=\"elementor-element elementor-element-205d6526 ddddf e-flex e-con-boxed e-con e-child\" data-id=\"205d6526\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3f672e81 elementor-widget elementor-widget-heading\" data-id=\"3f672e81\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">18 alternative investments investors should consider<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-24aac44 e-flex e-con-boxed e-con e-parent\" data-id=\"24aac44\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-309bd31 elementor-widget elementor-widget-image\" data-id=\"309bd31\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"2240\" height=\"1260\" src=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8.png\" class=\"attachment-full size-full wp-image-6782\" alt=\"Man looking at artwork to buy\" srcset=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8.png 2240w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-300x169.png 300w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-1024x576.png 1024w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-768x432.png 768w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-1536x864.png 1536w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-2048x1152.png 2048w\" sizes=\"(max-width: 2240px) 100vw, 2240px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-5f22414 e-flex e-con-boxed e-con e-parent\" data-id=\"5f22414\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5dee6c85 elementor-widget elementor-widget-heading\" data-id=\"5dee6c85\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Investment opportunities for inventors are becoming harder to score better returns. Alternative investments are several options that provide decent returns. But is alternative investing riskier?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5c3037a1 elementor-widget elementor-widget-text-editor\" data-id=\"5c3037a1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><b>Post summary:<\/b><\/p><ul><li style=\"list-style-type: none;\"><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>What is an alternative investment?<\/b><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>What are the potential benefits of alternative investments?<\/b><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>What to know before considering alternative investing<\/b><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>18 alternative investments to consider<\/b><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Is alternative investing risky?\u00a0<\/b><\/li><\/ul><\/li><\/ul><p><span style=\"font-weight: 400;\">Investment opportunities for inventors are becoming harder to score better returns. There is good news, however. Outside the world of stocks, bonds, funds and other pre-packaged products, investors should consider alternative investment vehicles.<\/span><\/p><p><span style=\"font-weight: 400;\">Alternative investments include venture capital, private equity, p2p investing, hedge funds, real estate investment trusts, commodities, and tangible assets like precious metals, rare coins, wine, and art.<\/span><\/p><p><span style=\"font-weight: 400;\">And how big is the alternative investment market?<\/span><\/p><p><span style=\"font-weight: 400;\">According to research, the alternative investment industry is expected to grow by <\/span><a href=\"https:\/\/www.institutionalinvestor.com\/article\/b1bg5lknj62d7l\/Report-Alternative-Investment-Industry-Will-Hit-14-Trillion-By-2023#:~:text=The%20alternative%20investment%20industry%20is,investment%20industry%20data%20provider%20Preqin.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">59% by 2023, reaching $14 trillion.<\/span><\/a><span style=\"font-weight: 400;\">\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">What is an alternative investment?<\/span><\/h2><p><span style=\"font-weight: 400;\">An alternative investment is any investment outside the traditional areas of cash, stocks and bonds.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Alternative investments include intangible assets such as antiques, art, and wine and financial assets such as private equity and <a href=\"https:\/\/moneyhub.ee\/investments\/crypto-brokers\/\">cryptocurrencies<\/a>.<\/span><\/p><p><span style=\"font-weight: 400;\">Alternative investments have a low level of correlation with traditional investments. Therefore, they are less exposed to market conditions and can be used to lessen the overall risk of your investment portfolio through diversification.\u00a0\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Investing in assets often necessitates an exceptionally high level of analysis, as it can be challenging to determine their current market value.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">It&#8217;s up to individual investors to determine any alternatives they decide to include in their investment portfolios.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The great news is that the amount of alternative investment options available to investors has risen over the past few years.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">What are the potential benefits of alternative investments?<\/span><\/h2><p><span style=\"font-weight: 400;\">Alternative investments can be an excellent way to diversify an investor&#8217;s portfolio and help reduce their exposure to stock market shocks, as with traditional investments.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">However, low-risk alternative investment options like antiques, art, coins and wine will likely make or lose little money. They are thus creating possibilities to generate some additional income.\u00a0\u00a0\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Although some investments are off-limits for retirement accounts, the list of alternative investments is still reasonably diverse, whether to grow an investor&#8217;s capital or provide an income.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">However, the benefits of alternative investments can go even further than only building wealth.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">By allocating investor money to more niche projects like startups or documentaries, some investors can feel good knowing they are contributing to a cause they care about.<\/span><\/p><h2><span style=\"font-weight: 400;\">What to know before considering alternative investing<\/span><\/h2><p><span style=\"font-weight: 400;\">Generating higher returns comes with higher risks \u2014as is the case with alternative investment options.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Suppose individual investors are considering multiple options from a list of alternative investments. In that case, they and their investment advisor must perform due diligence to determine which options suit each investor.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">This is accurate given that the performance of some alternative investment ideas is non-public, which can sometimes make an adequate risk assessment and investment performance challenging to analyse.<\/span><\/p><p><span style=\"font-weight: 400;\">There will always be some element of risk involved, so it is crucial to consider all aspects before investing, and investors should be realistic about how much risk they are willing to accept.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Investors should consider asking themselves the following:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Are they able to afford these recurring fees?<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How easily can they withdraw their capital when they need it?<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How would they feel if they lost some of their wealth?<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">Once they feel confident in their answers, they should consider adding alternative investment ideas to their traditional investment portfolio.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">18 types of alternative investments for investors<\/span><\/h2><h3><span style=\"font-weight: 400;\">1# Antiques, art, coins &amp; wine<\/span><\/h3><p><span style=\"font-weight: 400;\">Whilst Antiques, art, coins, and wine may be considered hobbies rather than a form of investment, there are returns to be gained for those able to recognise a good bargain when they see one.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Fine wine has long been a source of enjoyment and a reliable investment option. According to the <\/span><a href=\"https:\/\/www.telegraph.co.uk\/investing\/news\/top-10-investment-wines-returned-150pc-five-years\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Telegraph, several investors have seen returns of over 150% over five years.<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">Prices for antiques, classic cars, art, and collectables have also increased. However, these assets are often cyclable, so it&#8217;s critical to understand trends and when the next downturn may occur. Like a property, many antiques (but not all) are appreciated as they become older and harder to find.<\/span><\/p><p><span style=\"font-weight: 400;\">Fine art is a sound investment because, historically, investors have received<\/span><a href=\"https:\/\/www.cnbc.com\/2019\/12\/07\/art-has-shown-long-term-returns-that-rival-bonds.html#:~:text=Contemporary%20art%20has%20returned%20an,high%20yield%20bonds%20averaged%208.1%25.&amp;text=In%202018%20the%20global%20art%20market%20topped%20%2467%20billion.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> returns of around 5.3%.<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">However, whilst the stock and art markets do not usually rise and fall simultaneously, art still endures shifts that can make investing risky.<\/span><\/p><p><span style=\"font-weight: 400;\">When buying coins to invest in, note two types: bullion coins and collectable coins. Bullion coins are produced by national governments, usually in highly desirable metals like gold.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Bullion coins are not collectable because they don&#8217;t derive their value from their scarcity but because of the metal in which they are minted.<\/span><\/p><p><span style=\"font-weight: 400;\">Collectable coins are valued not for their weight in precious metals but because few of them are made. As they are not in general circulation, they are scarce and, thus, highly collectable.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">2# Hedge funds<\/span><\/h3><p><span style=\"font-weight: 400;\">Hedge funds are managed by an investment manager who picks which funds to invest. They enable individual and group investors to diversify their portfolios in multiple asset (and complicated) structures, thus spreading the risk of a portfolio.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Hedge funds have proven to be reasonably reliable at gaining returns for investors. However, they are commonly considered to be riskier, more aggressive, and exclusive than mutual funds.<\/span><\/p><p><span style=\"font-weight: 400;\">Investors should also note that the fees charged for participating in these funds are higher than those charged for other <a href=\"https:\/\/moneyhub.ee\/money\/mortgages\/\">investment vehicles<\/a>. The fund manager takes a cut of the profits earned.<\/span><\/p><h3><span style=\"font-weight: 400;\">3# Peer-to-peer loans<\/span><\/h3><p><span style=\"font-weight: 400;\">Peer-to-peer lending has been rising rapidly during the past few years. Peer-to-peer platforms cut out the &#8216;middlemen&#8217; in the crowdfunding lending process, thus reducing the fees involved in lending and obtaining profits.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Because of this, both lenders and borrowers obtain better rates than if they went to their <a href=\"https:\/\/moneyhub.ee\/bank-accounts\/\">bank<\/a>.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">P2P lending offers investors a more comprehensive range of investment options, thus diversifying their portfolios and minimising risk to their capital. Plus, P2P lending can begin with only a few euros\/pounds\/dollars, so it is an excellent option for new investors.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Howard Marks of Oaktree Capital Management <\/span><a href=\"https:\/\/www.oaktreecapital.com\/docs\/default-source\/memos\/coming-into-focus.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">cites P2P as one unique niche where he feels there is more potential for bargains. <\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/a><\/p><h3><span style=\"font-weight: 400;\">4# Property &amp; real estate<\/span><\/h3><p><span style=\"font-weight: 400;\">Commercial or residential property is a profitable asset in any portfolio for those seeking short and long-term returns.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Property and real estate investments can be made in many ways. They could include buying undervalued properties, renovating them, and selling them for a profit.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Other property and real estate investments include purchasing a share of commercial property through a peer-to-peer property-focused website where the platform manages and rents the property.<\/span><\/p><p><span style=\"font-weight: 400;\">Property does have its risks: the market is generally cyclical and will experience periods of decreasing value. While this may impact shorter-term investors, the property has commonly been seen to increase in value and, thus, returns in the long term.<\/span><\/p><h3><span style=\"font-weight: 400;\">5# Farmland<\/span><\/h3><p><span style=\"font-weight: 400;\">Another unique alternative investment idea is to invest in farmland. Like investing in property, appreciation is the potential upside to purchasing farmland.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Furthermore, investors can lease or sharecrop the farmland to make additional profits.<\/span><\/p><p><span style=\"font-weight: 400;\">Since this is a niche investment, investors will want to collaborate with a property professional who specialises in farm real estate.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Investors must also consider how long they will wait to see returns. Most farmland investors will only see returns after five years or more.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">6# Cryptocurrency<\/span><\/h3><p><span style=\"font-weight: 400;\">Cryptocurrency continues to attract much hype surrounding its technological potential, the blockchain.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Cryptocurrencies are virtual currencies that aim to operate independently of a centralised regulating body. Crypto is the encryption used to ensure that transactions are encrypted and safe.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The amount of virtual and digital currencies continues to grow, each claiming some form of uniqueness. Although, most will trace their lineage to the original cryptocurrency: Bitcoin.<\/span><\/p><p><span style=\"font-weight: 400;\">Early adopter investors who foresaw its value before the craze hit a few years ago made a small fortune.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">However, those who joined too late probably made some losses as Bitcoin&#8217;s volatility caused its value to be wiped overnight. <\/span><a href=\"https:\/\/markets.businessinsider.com\/currencies\/news\/bitcoin-price-tanked-days-coronavirus-market-panic-safe-haven-cryptocurrency-2020-3-1028993978#\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Even today, the original cryptocurrency remains volatile in the current COVID-19 world.<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">Furthermore, governments are still concerned about how cryptocurrencies and exchanges will be regulated. Investors should be aware that some currencies are likely to be abandoned entirely if governments view them as &#8216;unregulated&#8217;.<\/span><\/p><h3><span style=\"font-weight: 400;\">7# Private equity investing<\/span><\/h3><p><span style=\"font-weight: 400;\">Private equity investing is where investors, individually and as a group, invest in a company that does not publicly issue its stock.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Investors contribute capital to the company and then receive returns on their initial capital investment once it reaches a particular life-cycle stage. For instance, this could be during an initial public offering (IPO) of stock or a merger.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Private equity investment has often provided much-needed capital for startup companies in fields like:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">telecommunications\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">biotechnology<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SaaS<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">alternative energy<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">The success of private equity investing depends on how well the company performs, which is risky even in the right economic environment.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">For this reason, investors typically have a hands-on role in shaping the management strategy of the growing company.<\/span><\/p><h3><span style=\"font-weight: 400;\">8# Venture capital<\/span><\/h3><p><span style=\"font-weight: 400;\">Like private equity investing, venture capital (VC) funds are another option for investing in early-stage ventures. The difference is that VC funds diversify investor risk by simultaneously investing in several early-stage companies.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Still, early-stage investments are very high risk and far more likely to fail than to succeed. However, those that do well can make investors significant returns.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">In a typical VC fund, the goal is that at least one company will perform exceptionally, Thus covering the investment costs of all the losses contained in the other early-stage investments.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">It should be noted that venture capital investing is still one of the riskiest asset classes to invest in. Investor returns can take several years to materialise, and only some will see a return on their initial investment.<\/span><\/p><p><span style=\"font-weight: 400;\">Always be aware that most early-stage companies have a high probability of failure.<\/span><\/p><h3><span style=\"font-weight: 400;\">9# Managed futures &amp; options<\/span><\/h3><p><span style=\"font-weight: 400;\">Like hedge funds, managed futures funds are managed by fund managers. Future fund managers invest investors&#8217; money in futures or options in the commodities, currency and interest rate markets.<\/span><\/p><p><span style=\"font-weight: 400;\">Futures and options are primarily bets on how a specific equity or investment will perform. A future is a contract to buy a particular amount of a commodity, stock or even currency at a set price in the future on a set date.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The bet&#8217;s buyer or seller can then profit depending on whether the actual price rises or falls according to the agreed-upon price.<\/span><\/p><p><span style=\"font-weight: 400;\">Options work similarly because the buyer is provided with an <\/span><i><span style=\"font-weight: 400;\">option<\/span><\/i><span style=\"font-weight: 400;\"> to buy the investment rather than an obligation.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Managed futures keep investor portfolios diverse since they typically do not follow market trends. Still, the nature of predicting the performance of various commodity markets makes futures and options more risky.<\/span><\/p><h3><span style=\"font-weight: 400;\">10# Forex (foreign exchange)<\/span><\/h3><p><span style=\"font-weight: 400;\">Foreign exchange, or forex, is the selling and buying various currencies to exploit their value fluctuations. Known as arbitrage, it is counting on adjustments in currency market prices over time.<\/span><\/p><p><span style=\"font-weight: 400;\">Currency prices fluctuate continually as world events unfold. Investors may wake up one morning to discover a national coup, natural disaster, or other circumstance that has caused their holdings in a specific currency to rocket up or plunge.<\/span><\/p><h3><span style=\"font-weight: 400;\">11# Financial derivatives<\/span><\/h3><p><span style=\"font-weight: 400;\">Financial derivatives include options, futures, forwards, and swaps. Derivatives are agreements in which an individual asset reaches a specific level and pays out to an investor.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Futures and options (see alternative investment ideas 8#) are explained above. A swap is an asset exchanged between two parties, obtaining a preferential interest rate for both.<\/span><\/p><p><span style=\"font-weight: 400;\">Derivatives have a lousy reputation because economists have linked the <\/span><a href=\"https:\/\/www.thebalance.com\/role-of-derivatives-in-creating-mortgage-crisis-3970477\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">2008 credit crisis to the unregulated derivatives market and the subsequent mortgage crisis.\u00a0<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">However, if used &#8216;wisely&#8217;, derivatives can minimise investment risk within a portfolio.<\/span><\/p><p><span style=\"font-weight: 400;\">For instance, a fund manager might use commodity futures to offset potential losses in currency investments.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Some derivatives, like futures and options, are relatively manageable for individual investors. Large institutional investors and managed funds usually manage swaps.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">12# Trade Finance<\/span><\/h3><p><span style=\"font-weight: 400;\">Trade finance facilitates trade between buyers (importers) and sellers (exporters) by providing the necessary financing for and reducing the risks associated with commercial transactions.<\/span><\/p><p><span style=\"font-weight: 400;\">Given that <\/span><a href=\"https:\/\/www.wto.org\/english\/thewto_e\/coher_e\/tr_finance_e.htm\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">some 80 to 90% of world trade relies on trade finance<\/span><\/a><span style=\"font-weight: 400;\">, it dramatically influences economic growth at both the local and international levels.<\/span><\/p><p><span style=\"font-weight: 400;\">A typical trade finance loan funds the exporting company and is secured by the collateral being exported, usually some form of commodity or goods.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Sales are generated when importers pay the exporter to deliver the materials. Once received, the exporter then can repay their trade finance loan(s).\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Trade financing offers a variety of financing options designed to expedite commercial trade whilst mitigating risks to investor capital.<\/span><\/p><h3><span style=\"font-weight: 400;\">13# Commodities<\/span><\/h3><p><span style=\"font-weight: 400;\">Commodities include assets and resources such as gold, oil, and other precious metals like copper, fossil fuels, agricultural crops, and livestock.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Like the futures market, commodities are highly volatile because natural disasters and world events can directly impact prices. <\/span><a href=\"https:\/\/www.theguardian.com\/world\/2020\/apr\/20\/oil-prices-sink-to-20-year-low-as-un-sounds-alarm-on-to-covid-19-relief-fund\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">You only have to look this year to notice how the value of crude oil plummeted.<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">Agriculture is another volatile example. A considerable surplus of crop foodstuffs could make the price of that commodity fall dramatically. The following year, the country could experience drought, and the said crop value will rise as its scarcity triggers increased demand.<\/span><\/p><p><span style=\"font-weight: 400;\">The safest way for individual investors to reap the benefits of rising commodity prices is to purchase many different commodities rather than focusing on one.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">By doing it their way, investors can eliminate some of the uncertainty from choosing which commodities might rise and fall at a given moment.<\/span><\/p><h3><span style=\"font-weight: 400;\">14# Gas &amp; oil production<\/span><\/h3><p><span style=\"font-weight: 400;\">Gas and oil producers are faced with relentless pressure to grow production, and how they grow production is mainly through capital investments.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">This alternative investment can be appealing for diversifying an investor\u2019s portfolio diversification.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">However, Gas and oil production is a volatile alternative, so investors should embrace themselves for both gains and losses and have a high-risk tolerance.\u00a0\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">15# Marine finance<\/span><\/h3><p><span style=\"font-weight: 400;\">Marine finance is financing the construction, scrapping, or acquisition of vessels like boats and ships. According to the International Marine Organization, <\/span><a href=\"https:\/\/unctad.org\/webflyer\/handbook-statistics-2019\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">over 90% of everything we consume<\/span><\/a><span style=\"font-weight: 400;\"> travels by boat and sea, amounting to USD 12 trillion<\/span><a href=\"https:\/\/www.statista.com\/topics\/1367\/container-shipping\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> in 2017.\u00a0<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">However, investors must research marine finance, as it is highly influenced by market trends, including any downturns in the global markets or tariff hikes.\u00a0\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Although it takes on some risk, marine finance could be a potentially exciting investment opportunity.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">16# Aviation finance<\/span><\/h3><p><span style=\"font-weight: 400;\">Aviation finance used to be a sound investment. However, the coronavirus pandemic has caused the airline industry to take a severe downturn.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Before investing in aviation finance, investors should determine whether air travel will return to pre-COVID levels.<\/span><\/p><p><span style=\"font-weight: 400;\">If investors wish to invest in aviation, working with a professional from a fund rather than directly financing is best. A professional will understand air travel market trends and industry regulations.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Aircraft typically have a long life span of 20-25 years, meaning investors have a tangible asset in their corner. However, like most other tangible assets, aircraft do depreciate over time.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">17# Annuities<\/span><\/h3><p><span style=\"font-weight: 400;\">An annuity is an insurance product rather than an investment. Annuities pay a fixed sum per year for life (or a set period) and can be inherited by an heir.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Annuities provide stable, long-term growth income for those who purchase them. Investors can manage the amount of income and risk they are comfortable with.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The payout is usually when an individual retires and wishes to supplement their pension, retirement savings and other investments.<\/span><\/p><p><span style=\"font-weight: 400;\">When investing in annuities, be mindful of the fees involved. They can add up, and withdrawal fees are costly. <\/span><\/p><h3><span style=\"font-weight: 400;\">18# Film<\/span><\/h3><p><span style=\"font-weight: 400;\">An alternative investment option is to invest in producing films or movies.<\/span><\/p><p><span style=\"font-weight: 400;\">Although this is undoubtedly alluring before investors think about the glamour of a Hollywood spectacle, most film investment revolves around documentary and art-house films. Thus, it can be risky, as the film may need to succeed more.<\/span><\/p><p><a href=\"https:\/\/www.kickstarter.com\/film\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Kickstarter has a list of films<\/span><\/a><span style=\"font-weight: 400;\"> that investors can consider investing in, but once again, it determines whether the audience is for the masses or a niche one, which will limit its viewers.<\/span><\/p><p><span style=\"font-weight: 400;\">Investing in films does have the added benefit of supporting causes an investor cares passionately about and thus promoting them worldwide.<\/span><\/p><h2><span style=\"font-weight: 400;\">Are alternative investments riskier?<\/span><\/h2><p><span style=\"font-weight: 400;\">Of course, several individuals don&#8217;t believe alternatives belong in a portfolio. Some cite a need for more liquidity and transparency in their reasoning. This point does hold for specific alternative investments (although traditional investments, as per derivatives trading in 2008, are hardly open for scrutiny).<\/span><\/p><p><span style=\"font-weight: 400;\">Other sources state that including alternatives and diversifying a portfolio increases the likelihood of generating lower-risk returns.<\/span><\/p><p><span style=\"font-weight: 400;\">As with any investment, investors must be meticulous in due diligence before committing their cash to an alternative. Taking an in-depth look at investment requirements ensures the portfolio can accommodate the potential risk and long-term positions needed.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Also, note that historical performance does not indicate future returns; if in doubt, always seek the guidance of a financial adviser.<\/span><\/p><p><span style=\"font-weight: 400;\">Alternative investments are not only for deep-pocketed institutions and the very wealthy.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Individual investors seeking to beef up their portfolios can now diversify and seek better returns by considering the many alternative investments available.<\/span><\/p><p><b><i>*The information contained in this article is provided for general informational purposes only. It should neither be construed nor intended as a recommendation to purchase, sell or hold any security or otherwise be considered investment, tax, financial, accounting, legal, regulatory or compliance advice.*<\/i><\/b><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Investment opportunities for inventors are becoming harder to score better returns. Alternative investments are several options that provide decent returns. But is alternative investing riskier?<\/p>\n","protected":false},"author":3,"featured_media":6782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[21,20],"tags":[],"class_list":["post-6773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-useful"],"acf":[],"blog_post_layout_featured_media_urls":{"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-150x150.png",150,150,true],"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8.png",2240,1260,false]},"categories_names":{"21":{"name":"Articles","link":"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/"},"20":{"name":"Useful Info","link":"https:\/\/moneyhub.ee\/en\/category\/useful\/"}},"tags_names":[],"comments_number":"0","rttpg_featured_image_url":{"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8.png",2240,1260,false],"landscape":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8.png",2240,1260,false],"portraits":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8.png",2240,1260,false],"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-150x150.png",150,150,true],"medium":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-300x169.png",300,169,true],"large":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-1024x576.png",800,450,true],"1536x1536":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-1536x864.png",1536,864,true],"2048x2048":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-8-2048x1152.png",2048,1152,true]},"rttpg_author":{"display_name":"David Bailey","author_link":"https:\/\/moneyhub.ee\/en\/author\/davidbailey\/"},"rttpg_comment":0,"rttpg_category":"<a href=\"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/\" rel=\"category tag\">Articles<\/a> <a href=\"https:\/\/moneyhub.ee\/en\/category\/useful\/\" rel=\"category tag\">Useful Info<\/a>","rttpg_excerpt":"Investment opportunities for inventors are becoming harder to score better returns. Alternative investments are several options that provide decent returns. But is alternative investing riskier?","_links":{"self":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/6773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/comments?post=6773"}],"version-history":[{"count":0,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/6773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media\/6782"}],"wp:attachment":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media?parent=6773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/categories?post=6773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/tags?post=6773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}