Let’s face it, not all of us love the thrill associated with risk taking and enjoying its rewards. In fact, many of us just strive for the simple (safe) life, where nothing has to be a gamble (even if it does mean slower growth). It’s a comfort zone thing… Once you’ve found that space that works for you, it’s likely that you won’t want to push yourself to reap better rewards at higher risks. It’s human nature after all.

 

That’s why alternative investments have made a name for themselves. While the stock market is often seen as super risky, alternative investments seem to be less of a gamble and it still offer great returns (but perhaps without the severe ups and downs that we normally associate with the stock market). For the most part, it is not advised that alternative investments should replace traditional investments as a whole, but depending on the amount of money that you have at your disposal as well as on the level of risk that you want to take with your investment planning, you should definitely consider alternative investments as a facet to a more comprehensive investment portfolio.

 

What makes an alternative investment “alternative”?

Defining exactly what an alternative investment is, is quite tricky as it incorporates a variety of types of investments including equity and mutual funds through to commodities and hedge funds.

For the purposes of this article, we define it as follows: an alternative investment is a type of investment that does not fall into any of the three traditional classes of investments, namely stock investments, bond investments or cash investments. Alternative investments provide high-returns with low risk, which make them quite popular. An example of an alternative investment is venture capitalism, investments in fine art (including paintings and sculptures), fine wines or even coin collections (much like South Africa’s own Kruger Rands). What makes these alternative investments attractive is that common economic, market and bond fluctuations do not impact the value of these investments much, resulting in their worth generally being stable (or slightly increasing).

 

How can you get yourself some alternative investments?

Finding out more about alternative investments and whether they would complement your investment portfolio is as simple as chatting to your financial advisor. Many of the brands that MoneyShop represent also have alternative investment product offerings and, should you not have a financial advisor (or simply not feel like breaching the topic with him or her), we invite you to get in contact with them.