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.
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 😛
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.
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.
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 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
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
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
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.
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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– Back to Basics: Recovering from Negative Returns
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– Risk Tolerance Level: Part 2
– Back to Basics: Investment Asset Classes
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