This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The World of Alternative Investment

Victor German co-authored this article.

NEW YORK ( TheStreet) --Investors don't like the stock market the way they used to.

Retail investor participation rates in equities markets are low and have been for years. Who can blame them? Competing with high frequency trading isn't easy.

Fortunately, there is a world alternative investment to consider beyond equities, suitable for a broad range of capital levels and risk appetites. Forward-looking university endowment funds like those of Harvard and Yale paved the way, and in recent years smart money in general has taken notice of the alternative investment model.

In this article, the first in a series, we'll introduce the reader to several classes of alternative investment:

1. Real Estate:The most familiar way to profit from real estate may be the fix-and-flip, adding value by improving run-down properties. This type of investment can yield handsome returns, but it's a complex and potentially costly venture for those not intimately familiar with the process.

A similar idea is to invest in REO, or real estate-owned, properties, either directly or through a fund. In principle the approach can pay handsomely, as banks often look to get rid of distressed properties at a significant discount.

In practice, it can be a gamble -- properties are sold as-is, and an inexperienced buyer (or poorly managed fund) can easily fall victim to buying a property with expensive unforeseen issues.

Yet another direct investment option is crowdfunding. Sites like and offer smaller investors opportunities to participate in real estate projects in their communities to turn a profit.

For those not excited to get their hands dirty, there are publicly traded alternatives. One option is to buy and hold broad market REITs such as Vanguard (VNQ). There are also specialized REITs that can be used to play on specific market events, for example buying Healthcare Realty (HR) or Healthcare Trust of America (HTA) might be part of a bet on the market consequences of Obamacare.

2. Farmland: We made the case in a previous article that direct farmland investment may offer an attractive return profile for those willing to deal with the assets' inherent complexities. There are three ways to invest directly.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.50 0.59%
FB $104.08 -1.30%
GOOG $744.95 -0.71%
TSLA $230.24 -0.59%
YHOO $33.44 1.50%


Chart of I:DJI
DOW 17,745.51 -52.98 -0.30%
S&P 500 2,081.54 -8.57 -0.41%
NASDAQ 5,106.9570 -20.5680 -0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs