Increasingly, investors are turning to alternative investing to supplement the lackluster performances of fixed-income securities and other traditional investments, in their portfolio. With little or no correlation to other asset classes, alternative investments are proving to provide a great means of diversifying in a volatile investment portfolio, since they very rarely move in tandem with the stock or bond markets.
It seems that since the advent of the global financial crisis (2008), there have been an increasing number of alternative investing options that have become available to the investment community. In today’s markets, the available selection of alternatives are able to accommodate different investment goals and risk tolerance. Listed below are three low-risk alternative investments that are widely considered affordable and easily accessible. With that being said, investors should understand the common risks involved with investing and make themselves well-aware of taxes, restrictions and associated fees, before making a financial commitment to an investment offering.
REIT Index Funds: A real estate investment trust (REIT) makes money by receiving rental income from hotels, office buildings, malls and other real estate properties in their holdings. While REITs can have nicer yields than bonds, they’re also riskier.
Commodities: As a limited resource, commodities behave differently than stocks and bonds. Commodities have increasingly grown popular with investors who want to add diversification to their portfolios and take advantage of the limited supply of a tangible asset such as energy, agriculture, precious metals and investing in gemstones.
Shipping Container Investments: Considered by some to be a cross between commodities and an REIT, when investors invest in containers, they earn themselves regular income from the revenue that is generated from shipping leases. In most instances, these agreements have been established with international manufacturers and shipping companies and have a predetermined rate and term.
In the past, the most profitable alternative investment opportunities were generally limited to the institutional investors, endowments or affluent accredited investors, who enjoyed earnings of more than $200,000 annually or maintained at least $1 million in equity; excluding the value of their home. Nowadays, valuable investments like shipping containers are no longer a secret investment and have become both more affordable and available, over the last half a decade.