With the stock market finally recovering this past month, even closing at highs for the year, a lot of investors may be breathing a sigh of relief about their stock investments. You may have checked your online broker recently and discovered your balance looking a bit healthier than it did several months ago. But given the volatility we've seen over the past year or so, can we really trust that the markets are reflecting a true recovery in our economy, or is this just a technical bounce?

A lot of armchair market pundits I've been reading are keen on predicting that we're going to see a double dip recession. And interestingly, market insiders are also making defensive moves right now, apparently bailing out of their equity positions while the market registers this year's highs. This caught my attention, given that these very same insiders were known to be buying heavily when the market was carving out a bottom (at DJIA mid 6000).

So if you're worrying about what you should be doing with your investments right now, you're certainly not alone. But instead of wondering whether you should hang on tight or abandon everything for cash, I'd like to suggest that we think outside of the box a little and investigate some alternative approaches to investing. Here are 5 creative ways to invest right now.

1. Invest in lending notes.

While I've known of peer to peer lending for a while now, it's only recently that I've looked into it earnestly as an investor. I was particularly intrigued by the potential returns you can make by investing in notes (between 7% to 9.6% as an annual average). For more details, you can check out my Lending Club review and evaluate this particular lender's personal loan rates to gauge what you can earn as an investor.

2. Explore foreign currency investments.

Are you interested in adding some foreign exposure to your portfolio beyond owning traditional international equities? Then you may be interested in foreign currency CDs which are certificates of deposit that are invested in various world currencies. There are variants of this product that may give you downside protection (most currency CDs do expose you to currency risk): for more information, check out my EverBank review, which discusses such products in more detail.

3. Ladder your cash instruments.

Short term cash reserves aren't the most exciting things these days, given the low yields they've got right now. So for the short term reserves I have, I've opted to use a CD ladder, which requires staggering the purchase of certificates of deposit of various terms so that they reach maturity at various times. Laddering allows you to diversify across CDs of differing rates thereby giving you a chance to enjoy a higher average rate of return. They also grant you some level of liquidity because of the different maturity dates represented in your CD portfolio. Here's are some of the best CD rates I've found, which you can explore for this strategy.

4. Diversify into precious metals.

For further diversification, consider delving into other asset classes such as precious metals, and in particular, gold. Investing in gold has paid off for long term investors over the last decade, but like any other investment, can be subject to volatility during certain periods. A good rule of thumb is to put only a small portion of your funds (say 5% to 10%) into this category for diversification purposes. Investors normally flock to precious metals when there's fear in the markets and the streets.

5. Diversify into commodities.

Aside from putting a small portion of your funds in precious metals, you may also want to investigate the possibility of buying a commodities fund, index or ETF. Relatively speaking, commodities are not a very popular asset category and are not widely found in the average investment portfolio. The truth is, they are meant to represent only a very small part of your holdings due to their volatile nature. However, if you are looking for one way to hedge your core equity portfolio (e.g. against inflation), then you may want to put a little bit of money in a commodity index fund like the PIMCO Commodity Real Return Strategy Fund (PCRDX).  This particular type of investment has both its champions and critics, so do your best to learn about it before investing.

So what about investing in the obvious? Now that stocks and real estate are down from their price peaks, you may start feeling tempted to move the lion's share of your portfolio into these weakened areas. I would caution you from making such radical moves though, since outright market timing can be a dicey game (you can be wrong, after all!). Instead, look into rebalancing your investment portfolio if you haven't done so already, in order to keep to your original asset allocation (by shifting your funds accordingly, you're actually buying low). Or if you really want to invest in real estate, make sure you study the local markets. Alternatively, you can simply go for REITs, which are so much easier to manage. But if you're thinking about buying a house to live in, I believe that now is a good time to buy!