Planning for a prosperous financial future in a low interest rate environment is a difficult task. This is because historically low interest rates have made certificates of deposits, cash and short term bonds, a very unattractive investment option. Because of this, many investors have chosen to “look outside the box” and seek-out investing opportunities that will help them to diversify their investment portfolio. This is done so that it addresses the different types of risk that threatens investors and encourages their portfolio to perform well in all market conditions. Although the stock market is considered by some to be an investment with reasonable returns, stocks are a risky investment and can perform badly in an environment that is subject to rising interest rates. On the other hand, alternative assets such as hard assets can be bought and sold in a number of convenient ways and have proven they can perform well in tumultuous markets.
For those who are unsure, an alternative investment is a product that is outside of stocks, bonds and money markets. Alternative investment products such as shipping containers are practical investments that perform well during times of increasing inflation. At the moment, inflation in the United States remains close to 1 per cent, which has helped the American’s central bank to keep their rates very low, with little worry that inflation rising out of control. However, with the Bank of England more likely to increase rates down the road, rather than adding additional economic stimulus, investors should consider alternative investments to help beat rising inflation.
With interest rates in UK and the United States likely to move higher over the next few years, investors should consider alternative assets as a way of diversifying their investment portfolios and managing unexpected risk. Although the safety of low risk investments like a bank savings account is attractive to some investors, the yields they offer in relation to the rate of inflation are extremely unattractive. A diversified portfolio that combines riskier assets with dependable alternative investments like container investing, can still perform surprisingly well when interest rates rise and traditional investment values drop.