Investments Explained: Alternative Investment

What are alternative investments?

What are alternative investments?

Alternative investments exist outside of the traditional investment paths of real estate and stock. They can cover a range of opportunities, from coins and carbon credits to bamboo and forestry schemes.

Alternative products tend to fairy illiquid and their current value is tough to specify. As a result, the risk of losing an investment is higher than with standard property opportunities, which necessitates many of careful market research before investors choose whether or not to purchase in.

But for purchasers who are prepared to accept the risk, alternative products can help to reduce overall exposure to the uncertain global economy by diversifying an investor's portfolio.

Can you give an example?

Popular types of alternative investment include:

Antique investments

Over a long period of time, an old artefact or treasured object can sees its value increase. Returns on antique investments heavily depend on the tastes in the market and their authentic worth, but patience can often pay off.

Fine Wine investments

Fine wines are a commodity investment, much like antique or art, which relies upon the increasing value of the chosen wine over time. With patience and the careful selection of the right grape, returns can be as sweet as the drink itself.

Carbon credit schemes

Carbon credits are a way to combat the rise in carbon emissions around the world. By purchasing and selling credits, for example, to offset a business trip that involves flying between countries, firms can help to tackle deforestation. Investors with stakes in carbon trading schemes can then generate returns, secure the future of their wallet as well as the planet.

Renewable forestry investment

Renewable forestry, like bamboo, is an increasingly popular type of alternative investment. This environmentally-friendly material, which has a range of uses from scaffolding and decking to clothes and furniture, is expected to increase in value over the coming years as demand for sustainable timber sources grows. Bamboo plantations can be anywhere around the world, but tend to be located in South America or Africa.

Renewable forestry, like Carbon Credit investment, allows investors to put money in an ethical product, supporting both the world and the security of their investment.

by: Johnathan Etter

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