Alternative Investments - What are they?

With the decline of Property Investment funding by mortgage lenders over the last couple of years. Property Investors have began to look more closely at alternative investments.

It has been a long held belief by Investment experts that all investment portfolios should have 10% as alternative investments as a matter of course. Here we take a brief look at two options which are becoming more popular as the alternative investment market opens up to the average small investor.

Two Types of Alternative investments you may wish to consider

Wine Investment

Investing in wine isn't normally a short-term investment that can be cashed in quickly.  By adding a wine investment to your portfolio, you are holding what is called a "tangible asset" which will give you tax efficient benefits.  Quality wine is classed as a 'wasting asset' and is termed as a perishable commodity with a shelf life of upto 50 years.  So if you sell within 50 years you are exempt from capital gains tax and you keep all the profits,

But you do need to be cautious of heavily advertised wine investment schemes that claim very high returns.  Maybe look for a reputable and respected wine merchant and to treat them as a broker and don't drink your profits!

Investing in Forestry.

The return from forestry investment returns over the last three years were around 18-19% on a year by year basis. More pessimistic estimates put the medium to long term returns of approx 5% mainly due to the actual growth in the trees themselves.

Remember this is a gross return not a net return so you will need to take into account that there are a few costs associated with owning a forest investment including insurance premiums, forestry management charges, logging costs, etc.

Investing in forests is now becoming more and more accessible to the public due to the emergence of unit and investment trusts along with S.I.P.P. (Self invested pensions) and also becoming popular due to the investments carbon capturing advantages and worries about climate change.

Hope this gives you an insight into new avenues, remember, the more homework you can do especially as this may be new to you,  will give you a better chance of reaching your investment goals

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