Non-securities are also called real assets. Unlike stocks and bonds, non-securities are not traded on a public exchange. Usually, non-securities are physical assets with an intrinsic value. There are many different non-securities such as arts, real estates, diamonds, and etc. At the meantime, some financial assets can also be non-securities such as annuities and life insurance. Since non-securities are not traded on a public exchange, they are less liquidity than other investment such as stock and bond. Therefore, it often takes longer time to sell a non-security. However, there are still people buying non-securities since there are many advantages associate with them.
Since non-securities consider to be more stable than bonds and stocks which easily affected by inflation and other financial factors. As a result, non-securities can used for inflation hedge. For example, investing in non-securities can be a good option during the time when inflation and exchange rate fluctuation take place in financial market.
When studying finance, we often hear an investment strategy which is ‘do not put all eggs in one basket’. Non-securities can be a good option when you currently buying single type of financial product. Since non-securities are considered to be lower risk than financial investment, they can be a good option to add on your portfolio in order to reduce the level of your investment risk.
-Value increase & Cash flow
Even though some of non-securities products may cost you extra money for carrying fee such as maintenance fee for real estate properties, the value of non-securities usually increases over time as well. More than that, non-securities such as real estate properties are also able to generate steady cash flow or income streams for investors. Investors are able to make money from tenant for renting their properties.