Over the last decade we have seen the world economy fall flat, with just a few countries being the exception to this rule. But, what does this mean for investors? Could we start seeing the move away from traditional investment in stocks and shares? There are still plenty of alternative investments that can be made, as opposed to the traditional investment in stocks and shares.
However, the case of ‘not putting all your eggs in one basket’ proves quite apt here. The secret to success is adapting your financial portfolio so it becomes more diverse and impact less by events. So, if you are considering looking at some alternatives let us whet your appetite.
Most investors in fine wine make a steady return on their investment, usually between 5 and 20 percent. As with any commodity, the value rises as soon as the product starts to become scarce. This normally happens once output is no longer reaching the market. This why vintage wines make such a great investment. However, if you do decide to invest in wine, you will have to make a large investment to begin with, to make a decent return. It makes great sense to research and understand the products you are investing in. If you do not have the required knowledge, then acquiring the skills of someone who has can be beneficial.
Forex, which is short for foreign exchange, is a method that can turn lucrative profits. With that said, one should adopt a successful strategy, enabling them to see the best results. This isn’t easy and takes research, time and effort. However, when done correctly, those who are naturals can certainly make vast amounts of money – whilst Malaysia loves to trade Forex, it is also huge in many other countries, so be sure to add it to your consideration list.
A commodity could be anything from coal and oil to precious metals, crops and livestock. Anything goes here. Like with any commodity, consumer prices go up and down together with supply and demand. The commodities market is the most unpredictable and volatile out of these alternative investment opportunities. However, with this volatility comes the potential to reap the rewards. There are a number of companies that are set up that can help potential investors in commodities and precious metals.
Like a fine wine, fine art can provide an excellent investment opportunity. The value of fine art does not suffer the same fluctuations of traditional stock and bonds but rather has its own index (Mei Moses Fine Art Index). This index saw the steady increase, of around 10 percent, in the value of fine art. Again, just as for fine wine, you need a good solid investment base before heading out to auctions and galleries to buy art from more established artists. However, if you know a lot about art and artists, you can start with a smaller investment sum. You will need to take a gamble on smaller, undiscovered artists.
With all three of these alternatives, having a healthy industry and product knowledge is essential to your investment success. This knowledge of what to buy and when to sell will go a long way to ensure that your investment receives the best chance of giving you a safe return. The above are three ways in which you can diversify your financial portfolio, making it less susceptible to the same market conditions.