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Types of Alternative Investments

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Anonymous

12y ago
Updated: 9/17/2019

Different types of alternative investments do not use the types of methods that are used for normal investments. Normal types of investments include money markets, certificates of deposit, stocks and bonds. Alternative investments normally feature more risk than the average investment. However, they can be a great way for you to enhance your return on investment.

Investing in Real Estate

Investing in real estate can bring back many different tax advantages than undoubtedly enhance your return on investment. In fact, it many different investors have started investing in mortgages. Investing in mortgages can provide a decent source of reliable income. Buying mortgages can be done through a few different methods. This includes purchasing shares in Real Estate Investment Trust. You can also invest in mortgage lending limited partnerships and securities that are backed by a mortgage.

Investing in Hedge Funds

Hedge funds have something that might make it more interesting than the average type of fund. For example, hedge funds feature different trading strategies that regulators will not allow for a normal fund. This includes the ability to use short sales, futures and options for hedge funds. There is a wide variety of different holdings that an investor can add to his or her hedge fund. For example, these instruments include currencies, commodities, debt instruments and equity shares.

Venture Capital Investing

If you have a higher net worth that gives you the chance to take a higher risk, venture capital investing might seem worth the time and money to you. The venture capital investing method uses private equity to fund new companies that have not gone public yet. The hope is to invest in a company that can provide a large return on investment once that company goes public. Although venture capital investing is normally reserved for investors who have a higher net worth, it is possible for investors with a smaller budget to participate in this type of method. Smaller investors can take part in venture capital investing by putting money into a venture capital fund. A venture capital fund is like a mutual fund for venture capital investment methods.

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Wiki User

12y ago

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