As fears of a debt crisis in the Eurozone converge with poor economic data from the US, investors turn away from volatile traditional investment assets such as equities and bonds, choosing instead to investigate a range of alternative investments that provide shelter for the value of capital, and are less affected by market ‘noise’.
Here are three alternative investment strategies that are proving popular with investors heading towards 2012.
- Coins and Stamps
Numismatic investment (investing in coins) and philatelic Investment (investing in stamps) is one area that is receiving an increased attention. As with many alternative investments, the value of rare coins and stamps is driven by supply and demand. The rarer an item, the greater the value, although with coin investing the value of the metal is also a considered factor in the value of the coin, such as is the case with gold coins for example.
Investing in stamps was popular in the 1970s, but the bubble burst and prices took many years to recover. Investing in stamps, as with any type of investment in collectibles, require in-depth knowledge and skill to identify and value the assets.
With coins, many gold coins are still considered to be legal tender in the UK, and therefore offer tax advantages with regard to capital gains tax.
- Timber Investments
Another of my current selection of alternative investments hult private capital reviews would be to invest in trees. As tress grow no matter what happens in the financial markets, investing in timber plantations, either directly or through an investment fund or timber business, provide the investor with growth whilst the performance of other assets may falter.
Returns from timber investments are three-fold; the majority of return comes from the tree growing into valuable timber over many years, also, the price per unit of timber (usually cubic metres) also rises, with many of the main indices in developed markets showing timber prices rising by around 6% per annum. Finally, in some cases investors may also profit from increases in the value of the land on which the plantation is established.
The third and final of this small selection of alternative investments is Forex, or foreign exchange. This is a highly risky investment strategy, and can inv9ovle betting for or against the movement in value of one currency against another.
Investors may place their bet per unit of a rise or fall in value, and can easily lose more than the value of their original stake if the currency moves the wrong way.
So, there are a great many alternative investments to consider for the investor keen to divorce the performance of their portfolio from the performance of traditional markets.
According to recent research, institutional investors are holding up to 25% of their investment portfolios in alternatives in an effort to rebuild value lost after the recent economic crisis of 2008.