You may be concerned about how volatile stocks have become, and worried that the largest institutions have turned stock markets into a casino – and rigged the game in their favor. Or you may be underwater on your mortgage and have concluded that housing was indeed a big “bubble” and that your house is not the magic investing and retirement plan you may have thought. Or perhaps you are worried about the dangers of Quantitative Easing and are seeking a hedge against inflation. If any of these issues are of concern, then it definitely makes sense for you to consider alternative investments.
What is an alternative investment, and how can you as a potential retail investor find the best alternative investments that would be a fit for your future financial plans? Alternative investments are those outside of the traditional investments of stocks, bonds, insurance or cash. They are frequently used as a strategy to lower overall investment risk through diversification – the holy grail of the investing universe. An alternative investment is generally not influenced by the same things that affect the performance of stocks or bonds, and therefore their returns from are not correlated to financial markets. This improves the diversification of your portfolio, as alternative investments such as forestry or farmland offer stability and a hedge against the global stocks.
Just taking timber and farmland investments as examples, trees and crops generally do not particularly care what the stock market does on a day-to-day basis, as these assets are affected by totally different factors such as the growth of the trees and the global demand for food crops. Indeed, whatever the condition of the economy or the performance of stock markets, the world’s population continues to increase whilst farmland acreage decreases.
Timber and farmland investment have been rock-steady performers over the years, providing both yearly income as well as capital gains. Looking at the UK for example, stocks as represented by the FTSE have proven to be a highly volatile investment the last ten years, whilst the returns from farmland and forestry have been 13% and 10.4% per annum respectively. The same dynamic is true in other countries as well.
Historically, alternative investments have only been accessible to very large institutions such as pension funds, hedge funds or others like this. For example, we have seen a real boom in farmland investments in Africa due to the fantastic returns on offer, but the only option we had seen in this space was one with a US$5 million minimum; GreenWorld’s African farmland investment by contrast has a minimum of only £2,250/US$3,600. GreenWorld was started specifically to make alternative investments available to retail investors and smaller institutions.
We encourage you to browse our site and compare some of the options available in our alternative investments for retail investors. For example, some investments – such as our bamboo investment and farmland investments - focus on dividends and income as well as increases in capital value of the assets. Others are meant more as long-term holdings with a focus on strong capital value increases. Finally, for UK investors, all of our products can be included under SIPP rules as SIPP Investments. SIPP pensions give those saving for retirement far greater flexibility to manage and control your own financial decisions, and most of GreenWorld’s alternative investments are allowable under SIPP regulations.
Below our list of alternative investments - feel free to contact us at firstname.lastname@example.org to learn more.