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Since the market decline following the housing bubble, many young investors have been turned off from investing in stocks. While I still believe that the stock market can give stellar returns, there are those who are looking for alternative investment ideas.
Precious Metals
Since the beginning of civilization gold and silver have been seen as a symbol of wealth. Now many people view gold as a hedge against inflation and the devaluation of the dollar. The line of thinking is that the value of gold increases as the dollar decreases.
Buying precious metals has never been easier. You can purchase gold and silver ETFs that trade like actual stocks or you can buy actual bullion from Bullion Vault. The beauty of these two methods is that you don’t actually handle the metal. You can rest knowing that your investment is kept secure.
Real Estate
Because of the housing bubble many neighborhoods have an excess supply of houses for sale. Low prices caused by an increase in supply coupled with low interest rates has created an environment that has lured me into the possibility of becoming a landlord. However, buying an income property is not something that a person should enter without putting a great deal of thought into.
Like running a business, being a landlord in an investment that requires quite a bit of time and effort. Late night phone calls, maintenance, good and bad tenants and liability are all realities of owning a rental property.
If the effort required to be a landlord is more of a commitment than you’re interested in taking on, don’t worry. It is possible to invest in rental properties through REITs (Real Estate Investment Trust).
Like ETFs, REITs are traded on the stock market. When you invest in a REIT you own a small slice of a large number of rental units. You also don’t receive late night phone calls from tenants, you’re not responsible for repairs, and you don’t have to worry about evicting bad tenants.
Know the Risks Involved
Aside from perhaps a FDIC insured bank account, there is no risk free investment. Just like the stock market, the price of precious metals can become pretty volatile. The housing bubble has illustrated that even real estate does not come without risks. However, by learning about the products you’re investing in you can mitigate some of these risks. For me, the best investment advice has come from those who have succeeded in the area that I want to invest in.
What investments have you found success with? Have you experienced any failures? What did you learn?
Photo Provided By: Digital Money World
DISCLAIMER: All information provided on The Frugal Path is meant for entertainment purposes only. Do not take it as financial advice. Always contact a financial expert before making any decisions pertaining to your money.
I traded gold a while back but have now switched to currencies, which are pretty similar but more hands on as I need at least three currencies for daily operations. I try to hedge one against the other when the rate is particularly good. Lately I have switched to tangible assets like cattle, farmland, and on top of pretty strong returns, I like the fact that if everything goes south, I can still live on the farm and eat meat!
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With me being so close to the Canadian border we also deal a great deal in the Canadian currency as well. We even received some as a wedding gift from some family members who live across the river. And have made a little money by holding on to it.
I like have something stashed in precious metals. I prefer silver over gold though and can’t help but think that gold is overpriced (although I’ve been proven wrong over the years on that particular opinion), The funny thing with silver is that I prefer the cold hard metal over an ETF. I;ve read that many silver funds don’t back their issues with silver, I have read that SLV does but wouldn’t invest without doing a lot of research!
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If you’re fearful of a complete financial collapse, then holding the actual metal is probably a better choice. However, from an investment side, I’d rather use a fund because it’s much more liquid and I can get out when I need to. So I suppose it depends on your individual needs.
Its very difficult to say which investment is the best investment, but gold still holds a good place in the portfolio of an investor. You can store your gold coins and bars in your bank lockers.