About Alternative High Yield Investment

Many financial experts are recommending individual investors place some of their money from their portfolio into alternative investments. Alternative investments are investments that go beyond simply buying and investing stocks, bonds and mutual funds. Three types of alternative high yield investments are tax lien certificates, merger arbitrage and real estate investments.

Tax Lien Certificates

Municipalities around the country have outstanding property tax revenues. In order to keep the county running, the local government issues tax lien certificates, which gives an investor first claim to property in return for paying property tax on that property. The investor is also the beneficiary of all the interest that government charges. More often than not the investor receives the high interest and penalties that overdue taxes incur. In another situation, investor can foreclose on the property and the investor owns the lien.

Merger Arbitrage

When companies undergo a merger or acquisition, there is a typically a premium price that investors will pay for the stock of that acquired company. Merger arbitrage investment strategies allow savvy investors profit from the pricing discrepancy. Many companies who have stocks trading at $10, have the stocks purchased at $12 to $13 via a merger or acquisition.

Real Estate Investing

Many wealthy people have earned their money by investing in real estate. Buying investment property involves a large commitment of time and resources, and you should talk to a tax lawyer to find out benefits and negatives to real estate investment. It is a large time commitment to be a landlord and property owner, and many people may not find the return worth the time and effort.