Tag Archives: alternative investments

Reduce Portfolio Risk with Real Estate and Gold

Investment gains and losses are often viewed in a limited context. A focus on short term returns causes many investors to lose perspective of broader risks, such as having a portfolio that rises and falls in tandem with the market.

Thankfully, there are convenient ways to invest in asset classes that are negatively correlated to the broader market. These asset classes include real estate and gold. Despite volatility, limited exposure to these hard assets can reduce portfolio risk.

Investment Options You Might Not Have Considered

Prospective investors hold an unfortunate tendency to restrict themselves to a preconceived notion surrounding the nature of ‘real’ investments, limiting their activity to areas in which friends and family are investing or which they’ve heard about in the media. But as promising as those traditional stock options or government bonds may seem, viable alternatives do exist. Individuals hoping to build strong portfolios should keep the following options in mind:

Investing in Property with Crowdfunding

I was reading a press release yesterday from property crowdfunding company The House Crowd and it mentioned that they had recently hit the £2 million investment mark. With that in mind I thought it might be worth taking a few moments here to explain – to those who don’t already know – just what crowdfunding is and also what the potential benefits of crowdfunding are for the small investor, specifically in the property sector. To keep things balanced we’ll also mention the potential downsides too so that you can make an informed decision.

Investing in Gold ~ The Golden Problem

When you think about it, gold is a strange investment. It’s a metal that has very little practical value. You can’t make pipes, buildings, tools, or weapons out of it, it doesn’t conduct electricity nearly as well as the more available copper. It’s a soft, flimsy metal that does nothing but look pretty.

And yet, there’s a fascination with gold.

All currency, when you get right down to it, is an illusion. As a society, we convince ourselves that the little pieces of paper in our wallet (or bits of data in our bank account) have value. As a result, we behave as if they do; we exchange them for food, clothing, shelter, and everything else.  We accept them in exchange for those things, too.

Gold has, throughout time, embedded itself as something of a universal currency. The vast majority of humanity believes that gold is valuable.  As a result, gold is valuable. It’s something of a mass delusion, but it means that this otherwise relatively useless metal has become a sort of universal currency for the world.

The problem with that is this: the exchange rate for that currency is the price of gold, which tends to be a little schizophrenic. Gold, sayeth the marketers, is a great investment because it will store your value through the tough times. Often, though, the exact reverse is true.

Microfinance ~ How to Make Money and Feel Really Good About It

My seven-year-old self was sitting at the dinner table, staring down at a plate containing boiled brussel sprouts, when my mother told me about the starving children in Ethiopia. I’m still not sure why she picked Ethiopia over the other third-world countries, but there it was. I should be grateful for these brussel sprouts, went the logic, because elsewhere in the world children starved.

Except I wasn’t starving, and my mother was trying to make me eat these awful things instead of giving them to the poor kids. That seemed a double cruelty on my mother’s part.