Posts Tagged ‘calls option’
Alternative Investing In A Peculiar And Unstable Marketplace
March 20th, 2010
When guys get together anywhere, there is eternally some sport to talk about, but then there is forever time to run through what investment escapades one or the other have been through lately. No one is really nice to their money managers in these conversations either; but what are those poor managers to do? It’s a tough market for them – and they don’t get a standard fee for their services; they work on a 1percent commission. They really wouldn’t be standing by watching your investments take a dive if they could help it; their paychecks are taking a dive as well. And they are so sick of witnessing their incomes evaporate month after month, they are looking to new ways to invest money, to bring their salaries up to speed. New, alternative ways.
Mostly, money managers are not so pleased with the traditional philosophy, that investing in stocks is the best way forward. If you would read any expert investments journal for the people who supervise your money, alternative investments is something they can’t stop talking about. What exactly is ‘unconventional’ as they mean though? They just mean investments that are not welded to the stock indexes and the treasury bonds. They are considering pointing their clientele to ways to invest money like buying up farmland, investing in managed commodity futures funds, and diverse unrestrained mutual funds. So what is all this business with the farmland?
Farmland investment has been quite trendy for a while. Of course, you do need a certain minimum funding to get into this, typically about $120,000. You can buy a dozen acres of farmland, lease it out to those who till the land, and collect your $3000 royalty check yearly. And since land is always in demand, you could always sell it to get your money back, and then some. Why, in the last 15 years, land prices around the corn belt have risen approximately 7% every year. But land prices do fall, and there is no real guarantee. In Iowa, land prices frequently lose about half their value once every five years or so, and rise up to gain a quarter in the subsequent years. But there is a certain fulfillment involved in making your wealth tilling the ground, even if by remote control.
Managed commodity-futures funds offer some really good ways to invest money. And they are pretty unique too. What they do is they buy a stock call option on what they think is going to be hot in upcoming years, livestock, grain, or anything. And they hope that that product comes to be in demand. It doesn’t take much money to bet on the future in this way, and so many people could crowd near this soon. Investors seem to be making a lot of money this year on this type of investment. You don’t go to an everyday stockbroker, you go to a commodities trading advisor for this. Your broker or advisor will charge something like a fifth of anything you make. These used to be just for the large investors until of late. But hedge fund sponsors are now bringing the market to you and me. You can get in with $8000.
It may really be time to get out there and find new ways to invest money; the customary avenues have not in fact been very kind to us lately.