Whenever the economy on either side of the Atlantic starts to show signs of recovery, something else appears to sideswipe those green shoots and send everything back to square one. From Brexit in the UK to changes in the White House to events in Syria, the next catastrophe is never more than a few steps away.
As such, we seem to be in a perpetual world of rock-bottom interest rates – great news for anyone who can afford to buy a house, or who wants to take out a loan. But a big problem for investors or those trying to save up for a prosperous retirement. Little wonder, then, that alternative investments, that will behave independently of the wider economic market, are becoming increasingly commonplace.
Here, we count down four that have stood the test of time and that you should seriously consider including in your investment portfolio.
1) Going for gold
Piling up bags of gold coins under your floorboards might sound a little extreme in the modern era, but that is essentially what most investors are doing, at least as part of their broader portfolio. Products like Golden Eagle coins are a safe investment that is only ever going to go one way in value. Having said that, you would be well advised to consider a slightly more secure storage location than the floorboards or a mattress, however!
The real estate market has survived everything the broader economy can throw at it. The effect has been a divide between those who can afford to invest in property, and are becoming private landlords, and those who cannot, who are becoming their tenants. Commentators have been sucking air in through their teeth for years saying this is a bubble that is going to burst, but while, like those precious metals, the property market has shown some volatility, the overall trajectory remains a positive one, and that seems unlikely to change materially in the foreseeable future.
There are three downsides to buying property. It demands a significant investment, your money is tied up and being a landlord can lead to undesirable hassles and expenses. Real Estate Investment Trusts (REITs) effectively provide the gain without the pain. By buying in, you can take advantage of the overall health and growth of the property market, without having to take responsibility for any physical property. You can also invest as much or as little as you wish, and take advantage of complete liquidity.
4) Life settlements
It sounds a little morbid, but life settlements have become big news over the past year or two. This is essentially where you sell an existing life insurance policy to a third party for more than its surrender value but less than its net death benefit. Effectively, this means a win/win for both parties, so it is easy to see why the concept has been so quick to capture investors’ imaginations. Life benefits settlements are strictly regulated, so make sure you go about it the right way, and get independent financial advice before you proceed.