Peer-to-Peer Lending

3) Peer-to-Peer Lending
This method of unusual investments bypasses financial institutions and works with individuals themselves. A website called Prosper.com lists people who want to borrow money with verified credit scores. If you are an investor, you can choose whom to lend money to and how much, making an interest in return. The returns with this method have been reported to be better than Treasury Bonds or Bank CDs.


4) Master Limited Partnerships

Master Limited Partnerships

These work similar to LP (limited partnership) interests, the only difference is that the Master Limited Partnerships are traded on stock exchanges. This increases liquidity. Most of the Master Limited Partnerships are energy- and commodity-related. They are also known to pay hefty dividends, and most of the income goes directly to the investors. Doing so, the Master Limited Partnerships don’t have to pay income tax on dividends.

5) Hedge Funds

Hedge Funds

The EFT market is growing faster than ever, and it is aimed precisely at small-scale investors. They offer investments that are hedge fund-like and they trade like stocks. The goal of hedge-funds is to apply quantitative techniques to spot incongruities between patterns in individual securities, sectors, and asset classes. The iShares Diversified Alternatives Trust is one of the most popular EFTs (listed on NYSE as ALT). Its aim is to profit from the discrepancies in price when buying derivatives like interest rate securities and futures contracts.

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