Back to Basics: Alternative Investment Asset Classes

A couple of days ago, we had a look at the 4 general investment asset classes.

Today, I shall list out a few others of what I’d like to call as the Alternative Investment Asset Classes.

They are:

Venture Capital

Venture capital is the act of investing in new businesses. The field of venture capital can be very lucrative, providing above average returns, due to the high-risk nature of it. However, the risk of going bust is also quite high.

Basically, what happens is that you, as an investor, provides money to startup firms/companies with long-term growth potential.

Examples: Investing in a new Nasi Lemak business, investing in Nadlique’s Blog 😛

Private Equity

A private equity is basically a syndicate (not the bad kind of course) where funds are raised and used to develop new products or technology, expand working capital, make acquisitions and takeovers, or to build up a company’s balance sheet.

You need to have a heck load of money to be involved in private equity, thus it is usually not available to the average individual investor.

Art

There are many things that can be categorised as arts such as paintings, sculptures, and printmaking. These are usually long-term investments whereby capital gains are most likely to be produced.

Examples: Picasso paintings, Van Gogh paintings, Nadlique’s paintings here and here (anybody interested in buying my paintings? Hehe).

Collectables

This one here is a rather interesting asset class. Some of the things that come under this category can often be classified as junk by most people, not knowing that they could potentially one day provide you with a rather satisfactory return.

There’s a 20-cent coin that I saw at a Sunday market the other day being sold for $5 just because it is rare. The coin is about a few years old.

Examples: Coins, Baseball Cards, Trading Cards, Star Wars Toys, Transformers Toys, Stamps, Bank Notes

Antiques

Antiques is an asset class that is often affiliated with the senior citizens in our community. Many youths today regard antiques as scraps and obsolete.

Usually, a lot of people hang on to old stuff because of sentimental values rather than for investment purposes. Little do they know that they could potentially be sitting on a goldmine.

Examples: Classic Cars, Furnitures, Bone Chinas


Currency

This asset class is often discussed in the investment community with much interest. It is mainly because of the nature of currency whereby it is easily available to an average individual investor with the potential to make quite hefty returns.

Examples: AUD/USD pair, GBP/USD pair

Commodities

A commodity is a good used for productions of other goods and services. It is often traded between traders to produce returns. You could perhaps buy some Gold now with the anticipation that it will increase in value in a year’s time.

Examples: Gold, Oil, Wheat, Pot Belly, Orange Juice


Derivatives

This is one of my favourites. A derivative is generally a financial product that is derived from its underlying asset. The derivative is actually a contract between two parties whereby its value is determined by its underlying asset.

Examples: Options, Futures, CFDs, Swaps

Any others you can think of? Please share in the comments section.

Cheers folks!

Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.

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Other related posts:

CFD Trading : An Introduction
Investing & Trading. What’s the difference?
My Lobster Project
Back to Basics: Recovering from Negative Returns
Back to Basics: Asset, Liability, Equity
Risk Tolerance Level: Part 2
Back to Basics: Investment Asset Classes
Back to Basics: Paying Mortgage MONTHLY Vs. Paying Mortgage FORTNIGHTLY
Risk Tolerance Level

About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. property?

    art/stamps/cars/antiques is a none stater in malaysia. most of the collections are not produced locally. Therefore, it may be better if u go overseas to source ur collections.

    Perhaps u should think of commodities/infrastructures such as bridges/ roads/ hospitals/ stadiums/ bourses/ trading platforms.

  2. Properties as in houses and the likes, is categorised under the 4 general investment asset classes. Refer to my earlier article.

    Investment assets don’t really have to be produced locally to be treated as investments.

    On the other hand, there are local stamps, antiques, and coins that can be treated as investment assets as well.

    The third part, bridges, roads, hospitals, and etc., do you mean by literally building them? That’s pretty much impossible for an average individual investor.

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