Understanding Non-Securities
A non-security, often referred to as a real asset, is an investment that doesn’t enjoy the limelight on popular exchanges like the NYSE or NASDAQ. These are the hermits of the investment world—valuable, yet preferring the solitude of private transactions over public scrutiny.
Key Takeaways
- Real Assets: Non-securities are alternative investments, undiscoverable on public exchanges, making them intriguing pieces to savvy collectors and investors.
- Diverse Examples: From sparkling diamonds to vintage fine art, these investments vary widely, each with their own niche market.
- Investment Access: While elusive, some non-securities can be indirectly accessed through publicly traded vehicles like ETFs, offering a taste of the exclusive without the hassle.
While these assets march to the beat of their own drum, avoiding the bustling public markets, they can be part of investment packages like ETFs which makes them slightly more attainable for the average Joe.
Valuation of Non-Securities
Valuing non-securities is more art than science (and sometimes it is literally art). Specialists with deep knowledge of each asset provide appraisals based on qualities that might baffle the common stock picker. So, if you’re in the market for a medieval tapestry or a shiny new coin, make sure you’ve got an expert who can tell a treasure from a trinket.
Personal Financial Assets as Non-Securities
Surprise! Some everyday financial instruments like life insurance and annuities are non-securities. They don’t trade on the public markets but play an essential role in long-term financial planning. Think of them as stealthy financial ninjas preparing a secure future for the times you’ll hang up your active income gloves.
By investing in these, you’re not buying a slice of a company or a debt note, but rather making a pact with a company to pay you back over time under certain conditions—kind of like buying loyalty from medieval royalty, but with less drama.
Related Terms
- Real Estate: Not just a place to hang your hat, but a classic non-security investment.
- Commodities: Like oil and wheat, they are traded, but they’re raw rather than refined into stocks or bonds.
- Collectibles: These are your fancy stamps, art, and wine, just dying to be stored and appreciated (in value and taste).
Recommended Reading
- “The Intelligent Investor” by Benjamin Graham: Gain insights into the principles of value investing, a handy skill when considering non-securities.
- “Rich Dad Poor Dad” by Robert Kiyosaki: Learn about financial literacy and the importance of investing in assets, including those that fall outside the typical securities box.
Armed with knowledge and a sprinkle of caution, stepping into the world of non-securities could unveil opportunities that add not just monetary value but also a splash of excitement to your investment endeavors.
