Money Into Wine? – Alternative Investments

Unless you’ve been in a comma the past couple of years, chances are you’ve looked into the idea of investing in most anything other than the stock market or traditional investments. When the market tanks, alternative investments can still yield high profits. The caveat is there are substantial risks involved.

Wine futures are one of the more popular alternative investments. For clarity, buying a box of Franzia does not qualify as an alternative investment. When purchasing wine futures, the vineyard is paid for a product that is still in the barrel. The consumer is guaranteed delivery of wine at what should be the lowest price for which it will ever sell.
Judging a wine 12 to 18 months before it’s bottled is like judging a painting with a few brush strokes on the canvas. If the artist is Dali, you might be safe in that assumption. If it’s Bubba Jones, you might want to reconsider investing. Always research the vineyard! Know from whom you’re buying.
The Foreign Exchange market or Forex began in the 70s when countries went from a fixed exchange system to a floating exchange rate.
Notable positive features of Forex are liquidity and accessibility. The market is open 24 hours, Sunday night through Friday. This creates an opportunity to react to any breaking news that might affect the market.
Forex has a reputation for risk and volatility. In reality, it’s fairly stable. Liquidity of major currencies insures price stability and narrow spreads.
The reputation comes from leverage ratios that are not available in other markets. Higher leverage (100:1) means higher profits and corresponding risk. Using less leverage reduces the risk involved while maintaining a nominal spread.
Real estate investing may cause many to cringe in fear. The economic reality is, more fortunes are made in a recession, than will ever be made in a boom. Desperate sellers are everywhere in places most people would never have imagined.
The secret to buying real estate is the average price has to be affordable by the average family. There are markets where a further price drop is inevitable. If you happen to be buying in that market, include that possible loss in value in the offer to purchase.
Due to families displaced by foreclosure, rentals are booming. Owning real estate does not necessarily mean pressure to sell in a down market. Renting the property and simply waiting it out is a viable alternative investment.