If you’re new to investing, the recent stock market turbulence might have you worried about your chances of success. You probably think of investing as a numbers game and know that if you don’t know the ins and outs of the stock market, you could use a lot of money.
It’s true that investing in the stock market is all about the numbers and knowing the figures companies and industries are making. With alternative investment strategies, you have options that don’t involve getting lost in a sea of numbers.
So, what are alternatives in investing, anyway? Alternative investments are a broad category, including anything that isn’t a traditional investment. For reference, traditional investments include cash, stocks, and bonds.
If you’re wondering what some examples of alternative investing are, wonder no more. Take a look at this nifty list of five investment alternatives.
1. Try a Business Investment
Buying stocks is the typical method of owning part or all of a business. Yet, investing only in businesses that go public means you’re missing out on thousands, if not millions of opportunities.
Investing in venture capital and private equity allow you to get in on up-and-coming businesses before anyone else can, and are considered alternative investments. Providing capital to a new business is a risky venture, especially when you don’t have much control over the business’s performance.
If you want to invest in a startup where you can call the shots, consider starting a business yourself.
No matter whether the business is yours or someone else’s, though, keeping it up and running is going to be an uphill battle. If you go this route, keep an eye on which industries perform well and have an insight into current events that affect the market, as if you bought stock.
2. Avoid Inflation With Precious Metals
Precious metals like gold and silver retain value throughout the years, even while the value of a dollar rises and falls. In fact, the value of a dollar used to be tied to a “gold standard.” That standard was eliminated, making the value of money reliant on trust and often less stable.
Traditional investments are affected by the changing value of currency. The good news is that you can bypass that investment downside by purchasing precious metals.
If you buy stocks in gold or another precious metal, you’ll have to pay some fees. Thankfully, there’s a workaround for that too: Buy the metals directly.
3. Cryptocurrency Keeps Rising
Cryptocurrency is a unique form of currency because it’s not tied at all to the S&P 500, Dow Jones, and other stock market indices.
Buying and trading cryptocurrency is much like trading stocks, and the many forms of cryptocurrency are, of course, currency. Stocks and government currency are traditional investments, but cryptocurrency is considered an alternative investment.
A few examples of cryptocurrencies are Bitcoin, Ethereum, and Stellar Lumens. As with American dollars and other currencies, the value of cryptocurrencies rises and falls. Overall, though, the market is trending upwards as more businesses accept cryptocurrency.
Getting in on cryptocurrency while prices are lower often pays off big time a few years later.
4. Hedge Funds Are Alternative Investments
Many serious investors hold hedge funds, which are risky investment partnerships that use aggressive strategies to maximize return. Even if you have one, you may not know that hedge funds are alternative investments.
While operating a hedge fund often involves trading stock, it’s unlike traditional investing in a few ways. Most notably, a hedge fund involves buying and selling operations that aim to make money, whether the market trends upward or downward.
There are other kinds of hedge funds, too, including investments in real estate and other alternative assets.
A downside of hedge funds is that it’s difficult to invest in one if you aren’t wealthy: You typically need to have a net worth of at least a million dollars or a yearly income of at least $200,000 for at least the prior two years to participate.
5. Alternative Investment Strategies Can Be Fun
Some people get a thrill out of investing in the stock market and watch the numbers rise and fall like they’re watching a football game. That might be you—Or, like most of us, you want to invest but see it more as a job than as a race or contest.
If you never thought investing was fun, alternative investments might be just what you need. Not only will adding alternative investments broaden and strengthen your portfolio, but you can have a great time investing, too.
You can invest in a certain kind of valuable property, like antique furniture, cars, wine, or rare coins. Your comic book collection could be considered an alternative investment, and so can the fine art and professional photography on your home’s walls.
After reading this, you may realize that you already have multiple alternative investments. Because alternative investments are a quick way to grow a large portfolio, using alternative investment technology and working with professionals helps keep track of and manage all of your investments.
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