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Thinking Outside the Box for Higher Investment Returns

INVESTING Thinking Outside the Box for Higher Investment Returns

Finding the right investments can be challenging in today's economy. Some unusual investments may produce improved returns in the modern marketplace.

Recent economic downturns have presented unique challenges for venture capitalists and investors. Recession conditions have prevailed in a number of sectors of the U.S. and global economy and have reduced the profitability of stocks and securities in many once-vital industries.

 

Some investment advisors and individual investors, however, have achieved better-than-average market returns by opting for less obvious prospects in the financial marketplace.Here are some markets that are outperforming the index funds.

Retirement Funding Strategies

Life settlement investments and reverse mortgage arrangements have become more available and accepted in recent years. Investors can choose among a variety of funds that incorporate these investments and provide higher-than-average returns on their initial monetary outlay.

 

Increased regulation on the part of state and federal agencies provides an added level of safety for investors in choosing these funds as part of a diversification strategy or to balance risks in their existing portfolios. Additionally, some recent changes in the federal tax code have made viatical settlements a more attractive prospect for senior citizens and have created added supplies of these low-risk investments in the financial marketplace.

Out of the Red and Into the Green

Green energy companies are solid performers and provide better returns than most other sectors of the technology marketplace. Wind farms, solar panels and hydroelectric companies are among the top choices for return on initial investment.

 

Additionally, more major retail and manufacturing companies are beginning to buy into the green energy revolution to ensure adequate power for their own enterprises as fossil fuel reserves diminish. Investors should consider these moderate-yield, low-risk prospects when creating a diversified portfolio.

Traditional Energy Still Strong

For moderate yields and relatively low risk, the traditional energy industry continues to deliver solid dividends and to experience only minor fluctuations in overall value. Investors should note that the same cannot be said of individual companies within the energy industry.

 

For instance, BP took a hit after the Deepwater Horizon disaster in the Gulf of Mexico and has not yet recovered in terms of stock prices. By maintaining a mix of energy stocks, most investors can weather even serious setbacks in this volatile sector of the global economy.

Pharmaceuticals

A perennial favorite among longevity investors, pharmaceutical firms offer low risk and high profitability in some cases. Over time, however, the major established firms tend to deliver reliable middle-of-the-road returns for committed investors.

 

This market is one to watch, however, since it is highly dependent on global and national regulations and rulings on patent rights. Loss of exclusivity for just one major drug product could sink profitability and stockholder dividends to a dramatic degree.

As with any investment product, performing the necessary due diligence is a must to ensure the right mix of risk and prospective reward for fund clients. By creating a consistent approach to risk and a diversification strategy to hedge against unexpected moves in stock prices or specific sectors, investors can establish a portfolio that performs well even when the rest of the market does not.

 

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