What Are Alternative Investments?

When most people think of "investments" they generally think about stocks, bonds and real estate. But aside from these, what alternative investments are there that can allow you to grow your money either without the risk of volatility that you see in the traditional markets today, or at rates that far exceed standard investment instruments? In short, what other ways are there to invest that you might not think about from the start?

One thing that you have to understand about alternative investments is that they are subject to less regulation that stocks and bonds. This means you can sometimes do things you wouldn't ordinarily be able to do, but it also means you'll have less visibility to the inside information about a particular investment. For example, you won't have the mandatory reporting that some types of investments have, so it may actually be more difficult to get a really good picture of what the risks and rewards will be. In addition, they won't have the same limits on fee structures that other types of investments might have. But don't let this be a barrier to your trying something new, as long as you vet it completely before you begin.

There are lots of types of alternative investments, some of which have been around a long time and others that are pretty new. Precious metals are one type of investment that is considered "alternative," even though people have been "investing" in precious metals for thousands of years. It used to be that gold and silver and even other metals were the standard currency in most countries, but then nations began minting their own currency, and eventually we arrived at "currency by fiat" which we have today. Other types of investments can be grouped into this same type with gold and silver: precious coins and rare stamps are collected by many as an investment, and they can certainly grow in value as time goes on.

In addition, there are certain types of alternative investments like hedge funds that allow investors to gamble on predictions to do with global currencies and commodities. Often these types of investments are unregulated or less regulated, so you'll definitely want to find out as much as you can about them before you put your money there. In addition, venture capital is another way people are growing their money -- directly investing in companies with a business model that you have direct faith in, and profiting when that company does well. Venture capitalists often have a chance to help build a real business that creates real products, without the middle-man layer that a stock market provides.

If stocks and bonds and real estate have left you cold, or if you just want the opportunity to increase your earnings with a bit of added risk, then alternative investments might be right for you.