For investors who are tired of the volatility that comes with investing in the stock market, there are alternatives. Since the financial crisis in 2008-2009 a different class of investment has emerged; one that offers more stability and less uncertainty. They are commonly known as alternative investments.
To clarify, alternative investments are any investment outside the traditional opportunities, like stocks, bonds, and high-interest savings accounts. Popular alternatives include private equity, investing in shipping containers and other hard assets, to name a few.
Using private equity, investors and/or managed investment funds make investments directly into private companies. In some instances, the private equity is used to conduct buyouts of public companies, with the intention of making them private. Funds raised through private equity investment are most often used to develop new products/technologies, expand working capital, make corporate acquisitions, or strengthen a private company’s balance sheet.
Popular because it is an income-generating investment, shipping container investing is an investment in a tangible asset. With the help of a container leasing company, investors can own a fleet of shipping containers that earn a monthly income for them. The shipping containers purchased by investors are deployed by the leasing company to industry leaders who operate on the busy trade routes around the world.
Hard asset investments, such as precious metals, real estate, and collectibles, have demonstrated their ability to preserve an investor’s capital. As well, hard asset investments have shown that they can make gains in the face of economic uncertainty and rising inflation. Fine wine and gold bars must be securely stored, farmland must be mowed, and classic cars must be maintained. If this is something an investor cannot do themselves, it may become an additional, unexpected expense.
Traditional investments have been relied too heavily upon by investors to produce solid returns week after week. Over the last decade many of the “go-to” investments have been performing very poorly. As long as traditional investments are subject to political and economical influence, investors would be wise to move toward alternatives to protect their wealth and improve the performance of their portfolio.