Alternative Investments

© Jess Yu -

Most investors are familiar with the basic investment vehicle–cash, stocks and bonds and precious metals like gold and silver. But for those looking to stretch their portfolio, there are some alternative investments that present the opportunity for growth from unusual places.

Real estate is one of the most popular forms of alternative investment. This can be either buying land itself or purchasing or owning a part of an apartment building, rental house or condominium. Money is generated from rent as well as the increased value of the property itself over time. Though this can also be a volatile market–as investors found out in the late 2000s when the real estate bubble burst and the continually rising property values suddenly plummeted–but financial experts say now is a good time to invest in this area. Property values are back on the rise, and construction on residential units or apartment buildings held off during the recession has kicked back up again.

Collectables like art or sports memorabilia also make for popular alternative investments. This is especially popular for people whose hobbies already coincide with valuable items, like those who keep stamp or coin collections. These items are investments with values that increase over time, while at the same time giving the investor a tangible item they can keep in the home and enjoy. Financial experts warn that this can be difficult, and an investor should understand what they are purchasing and the major factors–scarcity, the subject matter and quality of the item–that make it valuable.

For investors who want to get a steady stream of income while also helping a cause, charitable gift annuities are an increasingly popular vehicle. For these investment vehicles, the donor sets aside a large amount that they plan to give to a charity upon their death. The non-profit organization then gives the donor a steady stream of income, which is larger depending on the age of the donor. For those already planning on making a gift, this is a way to help get more out of it while also earning a tax deduction for the gift itself.