5 Investments That Will Get You Out Of Your Comfort Zone

Ninety eight per cent of people live inside their comfort zones for their entire lives. They don’t do bold and adventurous things.

Instead, they content themselves with regular, humdrum life – and that’s enough for them.

But there are two per cent of people who never stop pushing the boundaries. They don’t want life to be easy.

Instead, they want to see what it has to offer them.

Nowhere is this distinction between personalities starker than in the world of investments. The vast majority use pension funds, property and savings accounts to store their wealth.

But there is a small but growing minority who are going way beyond this and taking gambles in the process.

Investing is no longer the same game that it was thirty years ago. Thanks to stock valuations, just putting your money away and hoping for the best probably isn’t going to work.

Prices are unrealistically high right now, and they will likely fall in the future. So what else can you do with your money?

How can you invest in a way that takes you out of your comfort zone? Let’s find out.

Holiday Homes

Despite the chaos of global capital markets, people are still going to want to take holidays. And when they do, they will demand accommodation.

As somebody who has some investable money, this is an opportunity. In many cases, holiday homes are able to generate higher returns than second properties.

What’s more, the services that support holiday rentals are improving all the time. Platforms, such as Airbnb, are enabling people who own properties to connect with those who don’t more easily than ever before.

This is leading to a positive feedback loop, causing the market to continually grow.

Letting out a holiday home doesn’t necessarily require any hands-on work either. After a stay, you simply hire a cleaner to prepare the property for the next occupant. It’s that simple.

Private Equity

Private equity is a scary investment for many people. The idea of going in and purchasing a stake in an unlisted company seems high-risk.

Truth be told, it is. However, as you’ll discover in this educational guide, there are some considerable benefits.

For starters, there is less competition for private equity. Relatively few people have the cash available to go in and put substantial sums of money into a single firm.

There are also better growth prospects. Large cap stocks don’t always have much room to grow further.

However, smaller companies can grow in size by a thousand times or more before they reach their potential. That means that the value of your stake has the ability to rise much further.

Private equity is also something that you can really sink your teeth into. When you become an owner, you have access to virtually all the information about a company.

That’s not a privilege that you have when you own common stocks. Meanwhile, finding a manager for your equity investment is paramount to success. Consider a firm renowned for its seasoned team and consistent track record of delivering robust returns with a keen eye for identifying lucrative investment opportunities.

Having a proven ability to navigate the complexities of the private equity landscape is also a plus. Align with a manager dedicated to maximising returns while effectively managing risks, offering a promising partnership for a successful private equity venture. You will find it helpful to see more about manager selection to make the right decision. 

Emerging Market Stocks

Most people buy stocks on exchanges in developed countries. That’s because, historically, these were the only places where you could buy stocks.

Furthermore, there is what economists call a “home bias”. This is the tendency for people to buy stocks in their home countries instead of overseas just because they are closer to home.

For this reason, most people with cash to spare tend to overlook emerging market stock markets. They believe that they’re too risky or that their money isn’t safe.

But that’s not entirely true. While there is considerable risk involved, investing overseas may be a better long-term play than investing in markets back home.

The reason for this comes back to the likely stock market performance over the long term. When demographics move out of favour in a country, the performance of companies tends to fall.

We’ve already seen this happening in Japan since its working-age population began to decline at the end of the 1980s. Since then, the Japanese stock market has been relatively flat, despite massive government spending and record low-interest rates.

The same process is now occurring in economies around the world. Germany and Italy now face a demographic cliff.

These societies are ageing rapidly, and there is no sign that this process is going to reverse itself. The same is true of China.

Other countries, however, aren’t going through the same shift. India, for instance, will see its population continue to grow, eventually making it the dominant power in Asia.

This process will push up the value of its domestic firms and should lead to a stock market boom in the country. Interestingly, we’re already seeing this process play out in India, with prices rising substantially from just a few years ago.

Again, progress will be choppy, but long-term, countries like India are going to win.

Sports Teams

Relatively few regular investors put money into sports teams. They don’t understand how they work or the returns they offer.

But sports teams can be a great place to put your money, particularly if you pick one that is about to go on a winning streak.

As an investor, you should think of sports teams as businesses in their own right. The service they provide is entertainment, and they generate revenue through ticket sales, advertising and merchandise.

When you evaluate a sports team in this way, you often find out that they’re pretty good value for money.

Land

Another place you can invest is land – an often forgotten class of investment. What makes land special?

Well, essentially, what you can use it for. Big landowners love land because it rarely goes down in value and it gives them the opportunity to parcel it up and sell it off to the highest bidder when the situation calls for it.

Landowning is something that powerful people have been doing for centuries. It’s the backbone of the economy in many ways and while it might not be as exciting as some other asset classes, it can generate substantial returns.

Renting out the land for events, for instance, is a popular way to generate continuing revenues from it.

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