Never have all of your eggs in one basket.
We’ve heard this saying a million times, but it never rings more true than when you’re investing. It’s important to have alternative investing strategies that can ensure your portfolio is diverse.
If something goes wrong in one area, you’re still experiencing smooth sailing in another area. If you’re asking, “What are alternative investments?” and wondering how you can make them work for you, we’re here to help.
Continue reading this article to learn more about alternative investing.
What Is Alternative Investing?
Growing up, you’ve probably heard your parents talking about investing in the stock market, buying bonds, and other similar things. These are conventional investments.
When it comes to alternative investing, that term is talking about a financial asset that isn’t within the cash, income, or equity category.
Most of the time, these investments are left to the people that have high net worth since they are usually for the savvy investor. Now with alternative investment technology, there are even more options for places to put your money.
Many investors enjoy investing in art because it’s beautiful, and it can also offer a good return on their investment. Keep in mind that it is a risky place to put your money, so make sure you buy art you won’t mind hanging onto for a while.
You can buy art at art shows, online, directly from artists, and more. When you’re looking for art as an investment, you likely want to go to a gallery or an auction house.
You’re going to need at least $10,000 – $15,000 if you want to get a good investment piece from the fancier places. On the other hand, you might choose to spend only $500 – $1,000 if you think you see an artist that is budding and will continue to do well.
When you’re looking for something easy and simple to invest in, coins are a great choice. If you want to know how much the price of gold is on the stock market. You don’t have to fuss over numbers and try to figure out if it is a good investment or not.
If you find rare coins, you can hold onto them and sell them later when they’re even more interesting. Another simple thing you can do is hoard a bunch of nickels. Nickels are great because they will continue to rise in value, and even if nickles no longer circulate in the future, you can still get paid off of them because of their materials.
3. Fine Wine
Since wine is a physical thing, there is only so much of it. There is also the limitation as to where it is able to be produced, and great vintages are only found rarely.
Wine improves its quality as it ages, and besides that, it increases in worth as more wine is opened and consumed. It doesn’t look like the demand is decreasing any time soon, so get your hands on some wine and hide it away.
4. Private Equity
Investing in a company that doesn’t offer stock to the public can be a good alternative investment. You put your money in as an investment, and then once the company hits a certain stage of growth, you start receiving returns.
If the startup company does very well—your investment does very well. On the other hand, if the investment flops—you’re out your money.
5. Managed Futures
Managed futures can be a good way to get into the big leagues of investing. A fund manager pools your money with other investors and puts it into different financial instruments.
The reason they are called managed futures is that they are options in the currency, interest rate, and commodities markets. You’re basically betting on how a specific investment or equity is going to perform.
Commodities cover a large variety of things you can invest in. When you think commodities think about coffee, livestock, coal, copper, gold, and more.
Unless you have a strong stomach, you might not want to play in this arena. The commodities market is very volatile, so you might be way up one day and down the next.
If there is a natural disaster or world events that take place, it might tank your investment and wipe out everything. On the other hand, if things go very well, you might get a good amount of money back compared to your investment.
7. Real Estate
Real estate is one of the best alternative investments. They simply aren’t making any more land, so it can be a great place to put your money.
Yes, we have seen everything fall and crash to the ground in 2008, but that doesn’t mean it’s not a good investment. It just means you have to be savvy with where you put your money and when you put it there.
If you’re just getting started, one of the best things you can do is buy a rental property as the sole owner, throw your hat in the ring with a group of investors, or buy shares in a real estate investment trust.
When you want the most hands-off way to invest in real estate, a real estate investment trust (REIT) is a good way to go.
Becoming a Pro at Alternative Investing Strategies
Now you know more about alternative investing strategies. Instead of waiting around and hoping an opportunity falls in your lap, you now have some great ideas to get you started.
Do you want to learn more about investing and other important topics? Keep reading our blog to get the information you need.