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Tips on Investing in Non-traditional Options

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In today’s tough economic times, people are seeking to make investments that ensure the most return on their money. This calls for smart and sensible decisions pertaining to where and how to make the investment. Occasionally, it might also require that you look past the traditional investment options i.e. stocks, bonds, and mutual funds.

Non-traditional investment options are increasingly gaining traction among individual investors.

In addition to the group of investors seeking to diversify their traditional investment portfolios, a new crop of investors is increasingly putting money in investments well out of the mainstream as their primary investments.

Non-traditional investments are particularly attractive as they provide the investor with:

  1. Greater investment portfolio diversification beyond the traditional options
  2. Greater risk management options
  3. Access to investments and markets ordinarily inaccessible to regular individual investors

Devoid of the “head spinning” complexity of regular investments today, non-traditional investments are proving a worthwhile venture.

Some of the popular non-traditional investment options include:

1. Collectibles - Collecting things, albeit not a new activity, is fast gaining popularity as an investment option. People are increasingly buying collectibles with an eye on their potential returns.

While this form of investment could give substantial returns, working knowledge of the niche is required. Collectible prices have been known to fluctuate over short periods of time so it is important that one invests in them with “money they could afford to lose."

2. Jewelry - People are increasingly looking at jewelry as a form of investment rather than focusing on its ornamental value. Businesses like www.frontjewelers.net are helping individuals generate more investment options by offering them franchise opportunities.

It is safe to say that jewelry as a money minting investment can only get better with time.

3. Real estate - Property is arguably the ultimate tangible asset. In contrast to other tangible assets, the price of property performs more consistently and there are numerous ways to invest in the industry. Some of the real estate investment options include:

  1. Investment in rental property - In this option, you acquire a real estate investment at a value substantially lower than the market value. The property is then rented out to tenants. To make the investment pay off, the you look at the price of the property appreciating and mortgage amortization.
  2. Owning your own home - This is a much simpler way to invest in real estate. You live in the investments. For payoff, you look at a combination of mortgage amortization and price appreciation.
  3. Real estate investment trusts - REITs let you invest in massive income-generating properties. Unlike the other real estate options, REITs do not buy real estate properties with a view of reselling them but to increase their real estate portfolio.

    REITs could be alternatively referred to as trust funds with high yields that invest in very big properties and sell on big markets.

4. Peer to peer lending - In the recent past, there has been a considerable growth in the number of lending clubs on the internet. These lending clubs help bypass all the bureaucracy involved in banks as loan intermediaries. The lenders also make good returns on their investments.

[Editor's Note: I think I'd stick with the later two. After the Beanie Baby crazy of 1996 and its collapse, I'm not big on collectibles. I don't know the first thing about valuing jewelry. I can look up the price of gold, but I judge the qualify of craftsmanship or style to make it worthwhile.]

Last updated on February 28, 2015.

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