With market volatility and ongoing economic uncertainty, many investors are very concerned about preserving their principal. At the same time, they are still enamored by the idea that there must be something out there that can earn high returns and grow their nest eggs without undue risk. This contradiction can lead normally rational people into some unusual adventures.

Here are just three absolutely true examples of unconventional investment approaches – believe it or not.

A Horse Is a Horse, Of Course, Of Course – The young engineer was pursuing his MBA in the late 1970’s and wanted to get more exposure to accounting. So he and his wife invested $5,000 for a one-third interest in a Tennessee walking horse and he would manage the books. Another partner had a barn and corral and would arrange stud fees to generate returns for the partnership.

Unfortunately, there was a practice with Tennessee walking horses called “soring” in which the horse’s legs are intentionally wounded to enhance its high-stepping gait. While the partnership did not “sore” their horse, there was a huge public outcry against the practice and “the bottom fell out of the Tennessee walking horse market” (one of the greatest investment quotes ever). As a result, stud fees vanished and the partnership was on the verge of losing the entire investment.

At the same time, the partnership had taken out an insurance policy on the horse. This was not a casualty policy, which would have just paid the reduced market value of the horse, but an unusual life insurance policy which would pay a specific amount if the horse were to die. Not long after the market collapsed, the horse was struck by lightning, the life insurance policy paid off and the partnership (though not the horse) was made whole.

There’s Gold In Them Thar Walls – The businessman had accumulated around $40,000 in gold over the years and since he viewed it as a long-term holding, he decided to put it in the wall of his bedroom. Just to be safe (and unlike another gold investor who was profiled in one of these articles several years ago) he indicated the location of the gold in his estate planning documents.

When gold was hitting its highs in 2011, he decided he should take some gains. Imagine his horror when he opened the wall and the gold was gone. The he remembered that he had remodeled the bathroom on the other side of the wall a couple of years earlier.

He called his contractor friend who had done the remodeling work, but the friend knew nothing of the gold. However, he did recall that one of his long-time workers uncharacteristically failed to show up during the job. Another worker told him at the time that the missing worker had bought a truck and moved to Las Vegas.

Water, Water Everywhere – In 1996, the realtor had a friend who wanted to diversify from real estate. Together they acquired the franchise rights for a water store for San Diego County and all of Arizona. One factor that influenced the realtor’s decision was that, at the time, gas was around $1.25 a gallon while bottled water delivered to a home was $1.50 a gallon. There had to be an opportunity for a store where customers could fill their own containers with purified water and buy various water accessories.

While the plan was to sell franchises rather than become shopkeepers themselves, the franchisor required them to own a store directly. During their training in Las Vegas, the realtor was so bored that he sold large bottles of water “one for $6, three for $20”. The trainer noticed and remarked “you guys are gonna make a lot of money”.

They opened a store on Campbell Ave. here in Tucson and within three months it became readily apparent that the store could never sell enough water and accessories to make any money. And rather than sell franchises that they knew would fail, they chose to take legal action to terminate their franchise agreement and rights.

They were lucky enough to be able to get out of the five-year lease on the single store and to sell some of the equipment. Still, with the initial investment, legal fees and other costs, each partner conservatively lost $100,000. In hindsight, the only person who questioned the idea from the start was the realtor’s mother.

It’s easy to dismiss these examples as amusing stories that would never happen to a more practical person. But there are a number of valuable lessons here that every investor should heed. First, discipline and simplicity are great ways to keep out of trouble. Second, while there are indeed many perfectly valid ways to make money, most of them require commitment and a long learning curve; to think one can just wake up one day and leap in with no experience is folly. Finally, unconventional investments should be restricted to “risk capital”, which is simply a fancy term for money you can afford to lose.