Today, as never before, individuals are looking for alternative investment opportunities. With a volatile economy, one can no longer expect to find a guaranteed outlay with a high return. Therefore, investors are looking for lucrative alternatives. While speculators don’t have to replace traditional assets, such as stocks, bonds, and personal savings, the options listed below provide valid ways to diversify a personal financial portfolio. The following are five possible venture opportunities that you need know about.
1. Binary Options
Many individuals are looking for a trusted company that deals in digital options, these include either ‘cash-or-nothing’ or ‘asset-or-nothing’ options. ‘Cash-or-nothing’ binary options will pay out a fixed cash amount should the binary option expire in the black. The ‘asset-or-nothing,’ on the other hand, can pay-out of the amount of the ‘underlying security’. As the name suggests, there are two potential results; these are also referred to as digital, all-or-nothing, and European-type options.
2. Commodities and Futures
Commodities differ from traditional stocks/bonds and they add dimension to a personal portfolio. Commodities are based on demand and supply of real assets such as agriculture, precious metals, energy, and livestock. Typically investors trade options or futures through speculation. This type of investment comes with high-risks. Commodity-based ETFs provide a viable alternative as they are either based on the futures of the commodity or are backed physically by the commodity.
3. Real Estate Investment Trusts
Real estate investment trusts (REITs) create investment opportunities through rental incomes received from office buildings, hotels, motels, shopping centres, malls, and real-estate holdings. The generated dividends are then passed on to investors and serve as an inflationary hedge and income source. Although they tend to yield more than bonds, REITs involve risks. Prospective investors are encouraged to check out REIT index funds that include publicly traded REITs.
4. Peer Lending
Peer-to-peer lending serves as another investment prospect. Lending groups are available for prudently screened borrowers who, once approved, agree on terms with the lenders. After lenders and borrowers are matched through a screening process, terms are established that meet the needs of both parties. Borrowers receive better rates and investors have the opportunity to collect an extra income. It’s important to note, however, that this type of investment runs the risk of debtors defaulting on their loans.
Forex Trading has become increasingly popular in recent years. The term ‘forex’ stands for the Foreign Exchange and involves the trading of different international currencies. Investors buy and sell currencies such as the Euro (EUR) and the US Dollar (USD). Most forex trading is performed through a market-maker or broker. The trader then chooses currency pairs where the value is expected to change and they place trades accordingly. These forex trades can involve a few simple clicks on the computer; when a trade takes place the broker then closes the trade at the market price.
Most experts agree that the alternate choices listed above come with unique challenges. It is recommended that beginning investors look at their options, weigh the risks, and secure solid financial footing before initiating any of these investment options.