Investors turn away from unstable conventional investment assets such as equities and bonds as fears of a debt crises in Europe and the US arose. Instead, they choose 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 to be trendy with investors heading towards 2012:
Coins and Stamps
Numismatic investment is the term for investing in coins. On the other hand, philatelic Investment is the term for investing in stamps. Both areas are receiving an increased interest. The value of rare coins and stamps is driven by supply and demand. It is an accepted fact that the rarer an item, the greater the value. With coin investing, the value of the metal is also a considered factor in the value of the coin. Gold coins are perfect examples. They are still considered to be legal tender in the UK, and therefore offer tax advantages with regards to capital gains tax.
In the 1970’s, investing in stamps was popular. Nevertheless, this trend faded and their prices took many years to recover. Investing in stamps, as with any type of investment in collectibles, need in-depth knowledge and skill to recognize and value the assets.
Foreign Exchange
Another alternative investment is foreign exchange. This is a highly dangerous investment strateg. It can involve betting against the movement in value of one currency against another.
Investors may place their bet per unit of a rise or fall in value of a currency. In addition, it can easily lose more than the value of their original stake if it moves the wrong way.
Timber Investments
Another alternative investment would be to invest in trees. No matter what happens in the financial markets, investing in timber plantations, either directly or through an investment fund or timber business, can provide the investor with growth while the performance of other assets may weaken. Returns from timber investments are three-fold. The majority of returns come from the tree growing into precious timber over many years. Finally, in some cases, investors may also profit from appreciations in the value of the land on which the plantation is established.
Conclusion
According to recent research, institutional investors are holding up to 25% of their investment portfolios in alternative investments in an effort to restore the value lost after the economic crisis of 2008.
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