Asset-backed note is a generic term for a class of debt instruments that offer a rate of interest to investors, in exchange for the use of their capital for some period of time. The easiest way to get the sense of these, is to think of them in terms of what they are not. We’ll […]
Category: Asset Classes
Asset-Based LTC
Asset-based long-term care insurance (ABLTC) is a hybrid approach, between self-insuring and purchasing a conventional, indemnity-style LTC policy. This type of contract was developed for those who do not want to have to bear the full force of paying for care costs out of pocket, but who also do not want to pay years of […]
Fixed Indexed Annuities
FIAs are insurance company contracts specifically designed for an exact purpose: give savers the chance to benefit when the stock market rises, but protect them from losses if the market falls. That goal is possible because of guarantee features which insurance companies are legally permitted to use, but which investment companies (such as mutual fund […]
Gold
Of all the precious metals, gold is the most popular as an investment. Gold is often seen as a store of value, but it’s also important to note that like all exchange-traded markets, gold prices can be driven by speculation. Some investors buy it to hedge risk. Others buy it in the hope that the […]
Real Estate Notes
In practical terms, another name for “mortgage.” Most commonly used in cases where the party making the loan is not a bank. That could mean various forms of owner financing, or private mortgages issued by investors to property owners. As an investment vehicle, these usually take two forms. The first is the straight-forward loan itself: […]
Rentals
Many people consider real estate to be the original alternative investment. Although there are certainly ways to speculate using real estate, for most long-term investors the goal is current income with the possibility of steady appreciation over the life of the holding. Rents are property specific, which creates a very effective diversifying mechanism. Rental payments […]
Life Settlement Contracts
A Life Settlement is the name for the contract by which an investor purchases an in-force life insurance policy from the current owner. In most cases, the policy owner is also the insured person. The benefit to the seller is receipt of cash today, versus some unknown future point. The benefit to the buyer is […]
Tax Liens
Tax Lien Certificates (TLCs) arise when property owners don’t pay their ad valorem taxes and the local taxing jurisdiction sells its rights to collect to an investor in order to get cash for operating expenses. TLCs basically constitute a government-sanctioned loan program to provide financing to delinquent property owners. From a public-policy standpoint, this is […]
Commodities
The term “commodities” is a catch-all term for hard assets and raw materials used in industrial applications and as ingredients for food products. Everything from feeder cows to coffee, and steel to oil falls under this broad heading. Investors are interested in commodities because the prices are always changing. As such, there’s an endless number […]