How To Get Started With Alternative Investments: 3 Vehicles

Investing in alternative assets is one of those things that just about everyone knows they should be doing, but because of confusion with regard to how to get …

Investing in alternative assets is one of those things that just about everyone knows they should be doing, but because of confusion with regard to how to get started, many people hold off. This is especially the case in today’s market. After all, with the market declining dramatically since the beginning of the year, it’s hard to put your money into traditional stocks. However, many are unaware of the alternative investment vehicles out there. Today, we’ll talk about three solid alternative investment vehicles that you may want to look into if you’re looking to get started in the world of investing.

Alternative Investment Vehicle #1: ETF’s

ETF is a short term for the term Exchange Traded Funds. Exchange traded funds work a lot like stocks in the sense that the investor buys an ETF and hopes for growth in the value of that ETF. However, when investing in ETF’s you’re not making a singular investment into one company. Instead, ETF’s can be based on several stocks, an index, commodities, bonds, or any other basket of assets. Because this investment is a basket investment, the investor’s money is more likely to grow because if one stock falls, another in the ETF is likely to pick up the slack. In positive market conditions, ETF’s almost always lead to strong gains. However, even under poor market conditions like what we’re seeing right now, ETF’s can be profitable.

Alternative Investment Vehicle #2: Binary Options

Binary options are becoming very popular as an investment vehicle because the control is put into the hands of the investor. When it comes to binary options, investors aren’t purchasing shares in a company, any amount of assets or even currency. Essentially, when trading binary options, the investor is simply making predictions with regard to whether the value of an asset is going to rise or fall. When making the prediction, the investor chooses the amount of time the movement should take, how much money they are willing to risk, and what reward they expect to see if they’re correct with regard to their predictions. The fact that no asset is being purchased makes binary options a great way to gain during down markets, and since the investor has control over risk and reward, managing risk is relatively simple. All in all, binary options are one of the best alternative investment vehicles in the retail market today!

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Alternative Investment Vehicle #3: CFD’s

CFD is a short term for the term Contract For Difference. Essentially, when purchasing a CFD, the investor is purchasing a contract that will require the exchange of the difference between the opening price and the closing price of a financial asset. Because the CFD does not require the purchase of any financial asset, it’s possible to see big gains, even in a down market. This is done by buying short. When an investor buys a short CFD, he is expecting the price of an asset to fall. If that happens, the investor will see gains equal to the difference in the asset’s price from the time of the CFD purchase to the expiration. However, if the value of the stock gains, the investor will need to pay the difference. The same goes for long CFD’s, which are CFD’s that investors buy when they believe that the value of an asset is likely to climb. The ability to make money from purchasing short CFD’s is a great way to make money during poor market conditions like what we’re seeing right now.

Final Thoughts

With the market being unquestionable at best right now, traditional stock investing isn’t necessarily a good idea. However, that doesn’t mean that you should give up on the idea of investing entirely. The reality is that there are several alternative investment vehicles that you can use to take advantage of upward and downward movement. So, what are you waiting for, it’s time to start investing!


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