The market is saturated with alleged methods for making substantial returns on your money. Knowing the ups, downs, and sides of each form of investment is challenging for many in the business let alone average members of the public. This is perhaps no truer than in regards to alternative investments.
Risk versus reward defines this category. These aren’t investment opportunities for those interested strictly in the slow and steady rate of return. Alternative investments exist in an arena where the best and brightest succeed via competitive calculation and instinct. The highs are incredible but the lows can be unbearable; it all depends on how well you comprehend the stakes, chances, and potential losses.Here’s a breakdown of the most common alternative investment options currently sought by ambitious investors with a keen sense for separating the winners from the losers:
Options
Options basically give the buyer the right, but not obligation, to call or put the stock at a chosen price within agreed-upon time constraints. This gives the stock owner either enormous freedom to buy and sell at will or provides for an anticipated, predictable set of outcomes. For example, binary options, as detailed here, typically involve commodities like corn and even fast-food with a fixed set of results based on a predetermined price. Returns in such preset situations hinge on the value of the stock at a specific point in the future in conjunction with the agreed-upon payout sum set at the beginning.
Precious Metals
Investing in gold, silver, and other precious metals has been a business practice going back thousands of years. It’s only gotten more complex as time goes on, with the current role of precious metals primarily serving to hedge against existing wealth rather than serve an intrinsic purpose. Therein lies the risk of the precious metals market for those unused to the bumpy ride: gold and so forth are only worth what the next person wants to pay. This distinguishes the precious metals markets from other investment venues where value, although varying, is based on goods or services, or:
Real Estate
The real estate market is even older than that of precious metals. After all there is no gold without the land to mine it from. Indeed, real estate investment possibilities for the average investor extend far beyond home ownership if they know how to play the game. Speculative “flipping” while continuing to be glamorized on television, is seeing fading popularity in favor of rent-focused approaches to getting returns on property.This may sound like a turn-off to those seeking the investment fast lane, but rising rents across the board showcase the returns potential for smart real estate purchases.
There is no shortage of options out there for would-be investors to try. Few make sense right off the bat. Alternative investments – those with sizable risk pushing against enormous reward – are especially confusing without a beginner’s breakdown. While none of these options can be explained in a few hundred words, knowing their basic foundations is a good place to get started. Good luck and happy investing.
Financial professional and online entrepreneur, I'm best known as The Financial Blogger. I want to make money because I like enjoying life the way it should be; with a lot of great food and wine! I also love to spend time with my lovely wife and 3 kids!
