NEW YORK (CNNfn) - Lured by exotic locales and the promise of big money, some starry-eyed investors are ignoring Wall Street in favor of vintage cars and frozen bull semen.
As the U.S. stock market soars to record highs, financial advisers say they still see some "fringe" investors who put their money in everything from tropical land deals to Beanie Babies.
"It's the same thing that motivates people to go to Las Vegas or buy lottery tickets," said Bob Barry, president of Barry Capital Management Inc. in Hacketstown, N.J. "It's the sense that there's an easy way to win the game somehow. It's going to be one deal, one roll of the dice, one lottery pick."
To be sure, most investors put their money in stocks, bonds and other mainstream financial instruments as the Dow Jones industrial average noses towards 9,000. But for other people, the motivation to invest is different.
"People want to buy the sizzle," said Karl Graf, president of Graf Financial Advisers in Wayne, N.J. "They want to see if they can beat the market."
Sometimes, people will invest in vacation property that they hope to turn into a second home, said Ross Levin, president of Accredited Investors Inc. in Minneapolis. States such as Montana, Nevada and Arizona are favorites for such deals, he said.
"They buy second properties with the thought of renting it out and eventually converting it for a second home," Levin said. "A lot of people are buying ranches."
Other people invest in hobbies such as race horses and classic cars -- or new businesses like restaurants.
"There seems to be a growing interest among professionals to own their own franchise or retail outlet," said Larry Johnson, president of Sterling Financial Advisers in Chicago.
But alternative investments carry a lot more risk.
Elissa Buie, president of Financial Planning Group in Falls Church, Va., recalled one case where a couple several years ago invested about $20,000 in an ostrich farm. The venture hinged on the belief that the market for ostrich meat would take off. The couple made -- and then lost -- several hundred thousand dollars.
"They made a bundle of money and then it died out," Buie said. She's heard other stories about people who think they'll "make a killing" in Beanie Babies. The investors in both examples weren't clients.
Buie said the mistake in investing in cars and motorcycles is that they are "depreciating assets." The only factor that increases their value is scarcity. But with a good blue chip stock, for example, there are thousands of employees working to make it more valuable.
Buie and other financial advisers say they recommend against trying offbeat investments. Graf said he tries to get his clients between "serious" money and "play" money.
Graf said one man (a client from a former accounting business) put $50,000 into frozen bull semen. The man wanted to capitalize on the lucrative cattle reproduction market, but the semen was faulty and he lost all of his money.
"The person who sold the semen made money," Graf said dryly.
In most cases, the people who make money are the ones who put the deals together, Barry said. Investors who get in later are usually less fortunate.
Congress wiped out some of the most questionable ventures when it abolished some tax shelters in 1986, Levin said. Before that, there were investments in windmills, Jojoba beans -- and exotic land deals in places like Belize.
However, when the bull market ends and valuations go down, there may be a resurgence in limited partnerships, said Susan Bradley, first vice president of financial planning at Raymond James and Associates in West Palm Beach, Fla. The reason? People will be searching for good returns.
"Five years down the road, you'll see a lot more of these limited partnerships and people are going to get burned," Bradley said. "They'll be much more susceptible to get-rich-quick schemes. They'll be looking for the rainbow and they won't get anything."
-- by staff writer Martine Costello