With the Euro in jeopardy, the threat to the economy of further regulation to the banking system, and the danger to the economy of an insufficiently regulated banking system it is fair to say that investors are living in ‘interesting times’. With this in mind, lets take a look at some investment ideas that should keep your money safe, and a couple of curve-balls that might just let you gain an edge.
Safety
In investment safety is a relative concept. Just about anything has the potential to go wrong, so obviously no investment can ever really be guaranteed to be totally watertight – and if the returns are below inflation then you are of course losing money in real terms, which you don’t need a PHD in economics to know is not the aim of the game.
I have written about premium bonds before. These remain a reasonable choice in order to park some cash. The chance of wining big can mean that it is more attractive to have money in these than earning a low rate of interest elsewhere. Of course although the capital is always accessible and totally secure, it is dependant on luck whether you can outrun inflation. Possibly not ideal in the long run, but maybe acceptable until things settle down a bit.
Another asset class which is seen by many as being fairly secure are so-called index-linked gilts. These are in fact government debt made flesh. Unless the government in question is question is Greece. The return on these is called a “coupon” – these can either be linked to inflation or running at a fixed rate.
Corporate index linked bonds can sometimes represent a decent balance of security and return. These are not to be confused with similarly named NS&I products, but there are some decent ones. There seems to be a broad consensus that the National Grid index-linked bond offers good value at the moment. First off it seems unlikely that the National Grid would go out of business, and at the same time the return is set to track the retail price index, plus an extra 1.25%.
Curveballs
When traditional investment vehicles are not delivering enough, it could be time to think about diversifying with some investments that are out of the ordinary.
The direction of property prices is far form being transparent. That said if you have reason to believe that you have spotted a bargain, and you have the liquidity, it could prove to be a good time to invest. Bare in mind factors like scarcity and future demand for property when assessing the investment potential of a property. Anecdotally rents are rising at the moment in many areas – so even buy-to-rent could be profitable if you don not have to put yourself in hock.
Of course there are also other investment vehicles that fall outside of the ordinary, but definitely require specialist knowledge. Some are even turning to classic cars as an investment, turning the money-pit reputation of auto mobile on their head.
Among the more mainstream alternative investment are art and wine. The important thing with these is the intrinsic value of the goods being invested in. Even if the investment does not pan out financially, you can of course still drink the wine and hang the art on the wall for you to enjoy. Of course hopefully it wouldn’t come to that, and the existence of experts offering dedicated advice to those looking for these kind of alternative investments is proof that many are taking these seriously as a proposition.
You can leave a response, or trackback from your own site.