Alternative investment options that are safe too

16-Jan-2015

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In today’s tough economic times, people are afraid to invest. They don’t want to spend money on a business they can’t know for sure will offer them returns. Fortunately, some are smart enough to take a risk. A standard financial puzzle balances both risks and returns, and whether we like it or not, we must admit that any type of investment is volatile. Today’s living costs are increasing, and people must find alternative ways to enjoy a decent living. There are many alternative investment options one can opt for, so here are a few safe ideas that can be extremely profitable, too.

Money market funds

The purpose of a money market fund is to offer investors a secure platform where they can invest cash-equivalent, easily accessible assets. It’s a form of mutual fund described as a low-return, low-risk investment. As opposite to stocks, the value of a money market fund share is always $1. The interest rate is the one that changes and the earning is called “yield”. Apart from being highly liquid and low risk, money market funds may appeal to investors because there are no loads (fees) involved.

Annuities                                

Very few people invest in annuities because they have the direst reputation. Nonetheless, this form of investment can also be safe, provided that you deal with reliable financial investors. Over the years, there have been many cases with investors offering annuities to people who just didn’t have enough money to invest and take that high of a risk. And yet, annuities have several solid benefits we just can’t overlook:

  • Guaranteed lifetime income
  • Tax-deferred earnings
  • Limitless investment amount
  • Investment adjustment within a contract with no additional taxes
  • Premiums for outliving the life expectancy of your annuities

Real estate

Investing in real estate is one of the safest types of investment; it has substantial growth potential, and unlike stocks and bonds, it takes a lot of time for this asset class to liquidate. The money you invested remains locked until that property’s price increases enough for you to make profit and sell. Even though today’s economy is still shaking, some real estate markets are booming; this means that some investors might even see the value of their properties double after a couple of years.

Hedge funds

Hedge funds can be considered safe alternative investments, but they’re often addressed to people who can afford to take risks. This form of investment guarantees high returns; it uses various strategies to make a profit in both domestic and international markets. Most partnerships are private, and the clientele is limited. Companies invest a range of derivatives, securities, commodities and metals around the world to make profit for their investors, and they’re often compelled to come up with solutions to market fluctuations.

Fine wine

Many people looking for alternative investments that are safe don’t turn to fine wine. That’s because they imagine that the whole process is too difficult for them to handle. The truth is, you don’t have to be a wine expert to make money with wine; you just have to like the product and know a little bit about what’s happing in the market. If you’re a wine aficionado, you have the highest chances of making a profit.

Start from the basics. Check official websites like Liv-ex for a clear idea about some of the world’s best wines and consult with wine merchant to help you select and store the right type. As a general rule, beginners should stick to well-known wines with proven track record, like Lafite Rothschild, Bordeaux, Haut-Brion, and Latour. Thus, you’ll be on the safe side, and your chances of seeing substantial returns are greatly enhanced.

It can be difficult to find a type of alternative investment that is 100% safe. In fact, it’s almost impossible. An investor must be aware that there’s always a risk associated to investing money, whether we’re talking about fine wine, stocks, bonds, hedge funds, real estate, annuities, and more. How much money do you want to invest? Are you willing to accept the fact that you might fail? Can you fail, learn from your mistakes and start all over again? Before making the decision to invest, answer these three basic questions as honestly as possible; after that you’re good to go.

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