alternative investment
Alternative Investment is any way of growing your money that sits outside stocks, bonds and cash, like land, gold, art, or a friend's rice farm.
In plain English
Remember the uncle who never touched the stock market but somehow always had land in three different towns? He would tell you with a straight face that shares are for people who like to gamble, but a plot of land in the right location never disappoints him. That uncle, without knowing it, was an alternative investor.
An alternative investment is simply money put into something that is not the usual shares, bonds or fixed deposit. Think land, real estate, gold, art, farmland, a share in a friend's transport business, or even cryptocurrency. These things do not trade on the Nigerian Exchange, they do not send you a dividend alert, and their value often depends on someone else wanting to buy what you have.
A Lagos trader who buys plots in Epe hoping the city will expand that way is doing an alternative investment. So is a doctor in London who puts money into a fine wine fund instead of buying more shares in her ISA, because she wants something that moves differently from the stock market. And a Nigerian abroad who sends money home more than for upkeep but to buy gold or invest in a cousin's poultry farm is doing the same thing, betting on something outside the usual financial products.
The appeal is that these assets often do not rise and fall with the stock market, so they can cushion your portfolio when shares are having a bad season. The catch is that they can be hard to sell quickly, hard to value fairly, and sometimes hard to even prove you own, especially with land that has three different people claiming the same plot.
So alternative does not mean better or worse, it means different. It is the financial version of having a second income stream that does not depend on your main job.
Ngozi has ₦3,000,000 in shares and treasury bills. She decides to put another ₦1,000,000 into a small farmland investment scheme instead of buying more shares, so that if the stock market falls, her farmland is not affected the same way.
Questions people ask
Is real estate always considered an alternative investment?
Yes, in most classifications, real estate sits outside the traditional basket of stocks, bonds and cash, so it counts as an alternative investment, even though it is one of the more familiar ones to Nigerians.
Are alternative investments riskier than shares?
Not necessarily riskier, just different. They can be harder to sell quickly and harder to value, but they do not always move in the same direction as the stock market, which is why people use them to balance their overall risk.
Can someone in the diaspora invest in Nigerian alternative assets from abroad?
Yes, many Nigerians abroad invest in land, farmland schemes or family businesses back home through trusted relatives or registered platforms, though it helps to verify ownership documents carefully before sending money.
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