There’s no doubt about it. Investing is tough today. As a new investor I once read that “today is always the hardest time to invest money”. Well, with today’s investment options personal investing is no walk in the park. Are there ANY investment opportunities out there?

There are basically four asset classes or investment options. Let’s see where we might want to invest money, and where we might want to lighten up. We start by looking for safe liquid investments like savings alternatives and cash equivalents. Short-term CDs, savings accounts, and money market accounts at the bank are paying less than 1%; and money market securities (like T-bills) and money market funds are paying even less. No investment opportunities here, but a safe place to invest money.

Our second category of investment options is bonds. HULT PRIVATE CAPITAL The average new investor might own bond funds, but unfortunately knows little about them. When you invest money here you earn more interest than above, but you give up the high safety. With interest rates at or near all-time lows you do not want to invest money heavily here, because when interest rates go UP the value of a bond investment will go DOWN.

Stocks (often called equities) are where most investors invest money to earn higher returns and get real growth. In a questionable economy like today’s a blanket bet on the good old U.S. stock market is riskier than usual. In 2009 stocks were up 60% in a matter of months in anticipation of better times ahead. If good times don’t develop, look out below!

You can make money investing in stocks in just about any market because there are always at least a few investment opportunities out there. That said, the odds of a new investor finding them are about nil – unless he or she knows what to look for. When the stock market falls the vast majority of stocks go with it. This brings us to the last of our investment options, alternative investments.

When you invest money outside of the box you are searching for investment opportunities that do not fit into one of our first three categories… alternative investments. With the exception of real estate, the new investor rarely ventures here. Over the past few years professional money managers have paid more attention to these less traditional investments in search of investment opportunities.

In theory, there is always a good investment somewhere. And the world of investing is full of investment options, from aluminum to zinc. To mention a few: real estate, oil, gold & silver, copper, other commodities, currencies, and foreign securities. The good news is that the average investor can invest in these alternative investments by simply owning stocks and mutual funds.

Investing today requires that you pay attention to the trends in various sectors and industries. When the stock market heads south some industry sectors or specialized areas buck the general trend. If gold prices soar gold stocks and gold funds go along for the ride. When basic materials prices or the price of oil goes up, stocks and mutual funds in or invested in those sectors generally follow suit. In a bad U.S. stock market some foreign markets manage to prosper.

Investing today is a challenge as uncertainty remains high. Don’t avoid safe investments just because interest rates are low, and don’t rely heavily on U.S. stocks and bonds. Get familiar with alternative investments. Spread your wings and diversify.

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