• Any responsible investment firm tells its clients to invest in a variety of markets, following the age-old saying, "don't put all your eggs in one basket." When a firm gives this advice, they do not mean only to invest in more than one company on the stock market. There is also a variety of investment types beyond traditional ones like stocks, bonds and real estate.
  
  

Collectibles

• Many people tend to think of collectible items as part of a hobby, something into which money goes but never comes back. Mention a recent, highly popular toy, however, and even these individuals will mention their wish that they had collected the toy before it became a craze. Those who did catch the fad sold them to desperate consumers after the fad demand overcame the supply. A similar concept can apply to some collectibles, such as art, stamps, coins and antiques. Like fad items, they follow a consumer's desire for novelty but are typically bought in hopes that age, not fashion shifts, will increase their value. The targeted future buyers are those hobby collectors mentioned before.
  
  

Commodities

• These trade materials do not follow the typical market mindset. Many products are custom-designed, like computers and automobiles, and so lead to competition between providers of that product. The wise investor gets behind the product that seems most likely to win the most buyers, over the longest period of time. Commodities work the opposite way: They are materials without much diversity, such as raw materials including rubber and steel, agricultural products like crops and cattle, even currency. No matter who puts them on the market, the quality of the product will not differ much from other providers. So, without having to factor in competition, commodity traders simply take advantage of price changes for that good: Buy when cheap, sell when bringing a high price.
  
  

Unorthodox Methods

• Sometimes "alternative investment" means a different way of investing, rather than a different type of investment.
  
  Hedge funds can claim the most popular "other" method, pulling in $1 trillion of the world's investment capital and growing each year. They operate on the old "hedge your bets" principle, investing the fund in a variety of strategies and markets to minimize the risk of relying on one "bet" completely. No one hedge fund works like another. Placed in charge of these funds are just the right professionals: investors who have been around for many years and can pinpoint a variety of economic opportunities.
  
  Some chances for fortune get buried under the roar of publicly traded stocks and foreign currency exchange ("FOREX"). Just as easily, a private company can receive and reward financing in private equity investment. These low-key dealings may suit an investor who does not want to wrestle with public trading, where the tiniest rumor about a company can ruin its market value for days, even permanently. Also, more than corporations, private companies tend to take orders from their financial backers, which gives an advantage to their self-interests in dealings with company management.