Alternative Investment Options for the Non-Traditional Portfolio


Most investors have a portfolio rich in stocks and bonds, and little else. While this is a traditional and secure way to invest, it lacks true sophistication, as well as the possibility of fast growth. In truth, this form of investment allocation is built for security in the long haul. It is a way for youngish people to set aside money and watch it grow at reasonable rates over the course of decades. By starting early, the investor will have enough funds to enjoy his or her golden years in relative comfort. While this may be a great plan for some people, others want to enjoy their money now. While there is no true get-rich-quick scheme (at least no ethical one that I would advocate), there are ways for the long term investor to allocate a portion of his or her portfolio in arenas with greater risk, and greater reward.

Alternative Investment Options for the Non-Traditional Portfolio

Spread betting is one of the newer investment forms to emerge in the marketplace. Though invented in the United States, spread betting has found its roots in the internet, in the United Kingdom. The concept is simple. Market fluctuate all the time. In spread betting, an investor makes a wager on the behavior of a market within a specific window of time. An example spread bet might be that the price of Apple stock would rise between 5 and 7 PM on a Tuesday. If indeed Apple’s price does rise, above a certain point, the investor will get a payout, based on how far above a certain watermark the stock rose. If the price falls when the investor guessed it would rise, and vice versa, the investor loses money in proportion to the degree to which the market or stock rose or fell.

Real Estate. Due to the financial crisis and subsequent housing collapse, many markets have tens of thousands of empty homes for sale. Many of these are found in metropolitan areas, where bank and city owned properties can abound. Because of their disused status, these empty houses represent empty patches in city tax bases, and cities are eager to have them snatched up. Some cities have been known to practically give these homes away, providing the investor who buys them gets them up to code within a year or so. Even if they aren’t $1, there are many abandoned places that can be had for $5k or $10k. Putting another $50-$80k into them has them as good as new, and the investor can either sell or rent the structures, depending on his or her needs. Real estate investment isn’t for everyone, but it represents a unique opportunity for investors today, one that will surely not be the same situation a decade from now.

Businesses. For those who have never invested in a specific business, take your time to understand what you’re getting into. Warren Buffett advocates never investing in a business you don’t understand inside and out, one you couldn’t run yourself. If you are able to do so, invest in local businesses, enabling them to do more in your community, and profit in proportion to your involvement. This is a great option for the investor who wants to remain connected to people in the area, not just dealing with numbers in a ledger.

Investment is a complicated affair, but it is a diverse enterprise, and can be used in many different ways. By allocating your portfolio according to your needs, your acceptable degree of risk, and your passions, you’ll have a portfolio that you are more than satisfied with, one to provide you and your loved ones security for years to come.