Need help with investing! What are alternatives to mutual funds?

[Nika]

Looking at the markets, I wish I had other alternatives to invest. Most of our money are in the stock market, which is pretty much the product of somebody's imagination.

I wish I could invest in Real Estate!!!

(In some way RE is that way also, but to a lesser degree. It is still something tangeable.)

We could buy real estate, if we lived anywhere else. But the amount of money it takes to be a RE investor in NYC and surrounding areas is just too large. (and long distance is not the way to go unless you are a bigger investor who can take more risk and pay for property management). So I am not really motivated to save -- Its frustrating when your money just slowly devalues.

So our retirement accounts are in pretty agressive mutual funds (long horizon). Haven't made much in the last 5 years (before the last dip I thought I was doing well, now I'm back to puny again).

Most of our EF is sitting in savings account/CDs and is not even keeping up with inflation (especially real inflation, for things that we buy, like food and gas...).
Some of it is in mutual funds and we just moved a little bit into Vanguard SP500 fund.

We have a miniscule amount of stocks and an Apple stock option that comes due middle of January.

I'm out of ideas. What can a person do, besides the stock market?

[bjl584]

That's a pretty broad question, but I have been keeping a few ideas for investing on the backburner as alternatives to stocks. One is, as you said, real estate. Another is to start a business, or be a partner in a business, or do some consulting and freelance work on the side.

[ez1]

I didn't read anything in your message about bonds or basically anything involving you loaning your money to others for some kind of interest. You could look at various investments in that arena. There's also commodities, which often have a different performance than stocks (i.e., diversification). Aside from stocks, bonds, commodities, real estate (either through actual purchases or through REITs) and investing in some kind of business ... I can't think of anything to do with your money.

Guess there's always the mattress

[jpg7n16]

The first step on the path to choosing an investment is to decide what your goals are.

What are your goals for an investment?


You should also learn more about what stocks are. They aren't the product of imagination. They are pieces of a business. You could go into business for yourself, or you could invest in someone else's business. Stocks are pieces of businesses that are so big, they needed to look for outside investors.

[chrisgayle]

Today people invest on gold other than stocks, because gold prices are always up in the market . A self storage business and leasing the land are the other alternatives to stock market.

[GREENBACK]

You could buy or invest in a fixed equity indexed life insurance policy. The beauty of this policy is you have no downside risk. With the stock market you have the risk of losing your money which you have experienced. With this policy you have no risk, guaranteed interest rate of about 5.5% (this rate varies by state, but is an rate approved by your state insurance department) or you can choose to earn a rate of return (historically in the 8% range) tied to a stock index (but your money is never invested in the stock market) and if the stock index you choose is flat or negative you earn a minimum 2-3% (approved by the state insurance dept.).

Your're an annuity salesman aren't you? Ain't no such animal as no risk and all return. I'll repeat that. There is no such thing as a guarateed returns and no risk.

[dczech09]

The person must be an annuity salesman. The thing that bugs me the most is how these salespeople market annuities as being low-risk investments.

THEY ARE NOT LOW-RISK! Their risk is determined by what is in the annuity.

Also...

THEY ARE NOT INVESTMENTS! Annuities are essentially reverse-engineered insurance policies. There is risk for both the writer and the buyer! Cmon annuity salespeople! Stop misrepresenting your products!

[snafu]

I know stocks look scary just now but it's exactly the right time to be buying so long as you do some research. Yes, there is risk but leaving savings in the bank loses buying power as you see food, gas, utilities escalate. There are companies you know are doing well in spite of the economy, Johnson & Johnson [JJ} comes to mind. Look on-line at companies you know and their history of paying dividends for example. Can you name the big rental companies in your area? Are they flush?

[patrecia]

I have been surfing on web on the profitable ways for investment and came across the option of mutual funds. Actually my friend also told me about this. I just want to know, is it a good way to invest our money.

[snafu]

patrecia, everyone's investment plan is specific to their personal factors; you must be able to sleep at night! Don't say Later! Talk to several different 'salesmen' aka financial planners to help you define what has the potential to meet your needs. Be prepared for roller coaster charts.

I've ordered a book called Strategic Dividend Investor and have been making purchases on market drops for Exchange Traded Funds [ETF], specifically DLN which holds 300 large capital US stocks. It's way cheaper for me than a typical American Mutual Fund.

Since I am responsible for our finances and still have about 20 yrs. my next ETF will be VWO-N which is an ETF for emerging countries [China, Brazil, S. Kr., Taiwan, India].

[JimInOK]

Those of you who invest primarily in broad market equity mutual funds, do you maintain that strategy in times like these or taylor your positions into more specific areas (like moving into higher yielding stocks while abandoning more speculative segments)?

My retirement portfolio is all equity right now, 35% large caps, 22% mid caps, 22% small caps, 21% international (with 2% of that being in emerging markets). Typical investments are Vanguard Growth, Fidelity Blue Chip Growth, Fidelity Contrafund, Vanguard Mid Cap Index, Vanguard Small Cap Growth, Scout Midcap, Janus Triton, Oakmark International, etc).

I'm trying to decide whether to ride it out as is, or redirect part of it into dividend payers or even selling enough to sit on 20-25% cash for now.

[Bond Investor]

You could try tactical asset allocation, which helps to manage/reduce the risk and still provides good returns.

[tlscott1]

I think there are a ton of options. It really depends on what you like and know. Here are a few ideas:

-Flip Houses
-Flip Cars
-Flip a website (i've done this and made over $2,500)
-Start a blog - make money with affiliate ads
-Bonds
-Partnerships (oil and gas partnerships have like an 80% tax deduction w/ good interest on returns)
-Managed Futures
-Capital Notes
-First Trust Deeds
-Life Settelement Trusts
-Pipe Investing
-Quantitative Trading
-Equity Based Lending

Hope this list helps

[chasingbread]

Check my post on peer-to-peer lending. Its aggressively growing and if you do your research you can get awesome returns.

google sociallending dot net
they have great advice on how to approach it, diversify, etc.

google prosper dot com
the company I use, but there are other good ones like lendingclub.

You can start with as low as $25 just to understand how the process works. After 18 months I have a 20% ROI. I dont think it will stay that high but I am feeling good about at least keeping a double digit ROI which speaks much better than my stocks. Check it out.

[jpg7n16]

I think there are a ton of options. It really depends on what you like and know. Here are a few ideas:

-Flip Houses
-Flip Cars
-Flip a website (i've done this and made over $2,500)
-Start a blog - make money with affiliate ads
-Bonds
-Partnerships (oil and gas partnerships have like an 80% tax deduction w/ good interest on returns)
-Managed Futures
-Capital Notes
-First Trust Deeds
-Life Settelement Trusts
-Pipe Investing
-Quantitative Trading
-Equity Based Lending

Hope this list helps

If you were trying to make a list of the riskiest investments known to man, I believe you left out Credit Default Swaps and Triple Leveraged ETFs.

Other than that, you have managed to put together quite a list of things with substantially more risk than the stock market.


The only thing on your list that is appropriate for a novice investor would be 'bonds.' And for a beginner, should be done as a bond mutual fund or ETF. The amount of capital needed to create a diversified bond portfolio is a huge limiting factor to bond investment. MFs and ETFs remove that limitation.

Even starting a profitable blog is something that takes time and experience. If you buy your own domain name, it will likely just be an expense, and not show a profit for a long time, if at all. Besides, I don't think people are banking on retiring off blogging income.