5 Alternatives to Investing in the Stock Market

Daniel Penzing
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Annuities are financial contracts designed to provide steady retirement income. Annuities are frequently touted as a safe place for retirees to hold a portion of their retirement funds.

Annuities owned by an individual are subject to income tax and even the death tax if the proceeds are passed onto a beneficiary. However, some annuities, called "immediate annuities" are not taxed upon distribution because they are valued based on the income they will produce.

Two broad categories of annuities exist: deferred and immediate. A deferred annuity is designed to provide retirement income at a later date. The provider, or an insurance company, holds the funds until the designated distribution period, such as upon retirement. There are penalties for annuitants who receive distributions before the distribution period expires.

An immediate annuity, on the other hand, is designed to provide a relatively small stream of payments immediately. If you receive a distribution from an immediate annuity, the IRS considers those payments income regardless of whether they are made annually, semi-annually, quarterly, or even monthly.

P2P Loans

During 2008, peer-to-peer lending began to become popular in the UK and Europe. In this type of lending, the lender gets to choose who to lend a money, and if the borrower is unable to pay it back, the lender can sell the loan to an investor or guarantee company. When considering an investment in peer-to-peer lending, it is important to understand all the risks, from the risks of the borrower repaying the loan, to the risk of the lender losing money if they decide to sell the loan. Some of the risk of loan repayment can be mitigated by investing in a qualified guarantor or trust. Each loan that you invest in is yours. So, you will be the one who profits if the loan is paid back, and you will be the one who loses if the loan is not. The lender has the power to decide how the loan is used and has the right to either accept or reject a borrower. If the lender decides to reject a borrower, then the only option of the borrower is to sell the loan to an investor or guarantee company.

The interest rate on a peer-to-peer loan is normally quite competitive, and the risk of losing money is limited, so lender can make a good return when the loan is repaid. Just make sure you understand all the risks involved before you invest, and make sure you do your due diligence on the security.

Real Estate


Gold is considered to be a safe financial investment. Gold in the physical form can be stored in banks or precious metal investments. There are many ways to invest in gold in this manner, and each way has its own advantages and disadvantages.

Spot price is the price for immediate delivery and is used by dealers to trade. Gold Spot price is the most common way of pricing gold bullion. The price of Gold Spot remains in constant flux, and it can serve as an easy investment option for small investors.

Gold futures are contracts to buy or sell gold at a future date at a pre-set price. These are traded on the New York Mercantile Exchange (NYMEX). Futures traders speculate on the future value of gold. The Commission is set to 0.8% per side. You can buy futures through a margin account, but you don’t have to.

Gold option is an option that allows you to buy or sell gold at a fixed price. There is no hard asset or gold backing it.

You can buy a gold mutual fund and store gold within it. The fund financial instrument enables investors to own gold in pieces, much like shares. The fund is then tracked by a brokerage firm, and owners can redeem the value of the fund with the firm. However, a mutual fund’s value will fluctuate because it is traded on the open market.