The COVID-19 pandemic has prompted retail investors to shift from traditional assets, such as stocks and bonds. Today, investors are more interested in diversifying their portfolios with alternative assets like cryptocurrency and precious metals.
As you’re probably aware, there’s a lot more to investing than stocks and bonds. There are many alternative investments that let you diversify your portfolio and make your money work for you in other ways.
If you’re looking to invest some of your hard-earned money, consider one of the following alternative paths:
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Cryptocurrencies have emerged as one of the hottest investment options in recent years. It’s worth noting that cryptocurrency is more than a buzzword.
Modern crypto exchanges make it possible to buy cryptocurrency in a secure and risk-free way. You can buy crypto with a credit card and even convert cryptocurrency (into fiat currencies). Also, these platforms let you track cryptocurrency markets and prices.
Here are a few tips to help you get started with crypto trading:
- Decide on the cryptocurrency you want to buy. You have several options: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
- Choose your payment method. Most people will opt for a bank wire transfer, but there are other ways to purchase cryptocurrency.
- Get verified by the exchange. Exchanges require you to verify your identity before they let you buy cryptocurrency with a credit card or bank account deposits. Verification can take anywhere from a few minutes to several days, depending on how busy the exchange is. So, keep that in mind when purchasing crypto from an exchange.
- Purchase cryptocurrency at the exchange and send it to your crypto wallet address that you’ve set up previously in Coinbase or another digital currency wallet provider website.
You now own cryptocurrency! Make sure you store it somewhere safe, like a hardware wallet, until you’re ready to trade again or sell for fiat currency on an exchange.
In 2022, it’s a good idea to build your alternative investment portfolio with collectibles. In particular, we encourage you to consider making some of the following a part of your collection:
- Rare coins and stamps
- Antiques and fine art
- Sports memorabilia
- Comic books
- Automobiles (often considered “collector cars” or “classics”)
Real estate is an investment many people look to for their long-term wealth, though the value of that real estate can be a moving target depending on the market. For example, if you were living in a small town that was suddenly “discovered” by city dwellers looking for more space in a more rural setting, your property value could increase dramatically due to high demand and low availability.
But what happens when the city folks decide they miss living near bars and restaurants? Suddenly your local market reduces in value due to high supply and low demand.
The best time to buy or sell real estate is when housing prices are at rock bottom—but even then, buying real estate is a huge commitment both financially and physically. It’s crucial to consider all of these factors before making any decisions about whether it’s right for you.
While it’s considered an intangible asset by the SEC, fine wine is actually a tangible asset that you can hold in your hand. Fine wine is very liquid and can be traded quickly. It’s also a hedge against inflation due to its scarcity and limited production.
The price of fine wine has risen over 400% in the past 15 years, which outpaces many other assets. Furthermore, fine wine is an alternative investment asset class with a low correlation to traditional investments like stocks and commodities. That means it has the potential for good returns even when other markets are down.
Physical Gold and Silver
Physical gold and silver have been used as currency and assets since the dawn of time. They have a very high “liquidity value,” meaning that if you need to sell them, it’s quite easy to do so. Gold is thought of as a hedge against inflation, but it is actually quite expensive at the moment.
Silver, although less valuable and more volatile than gold, has been rising in price over the past few years. Both gold and silver are tangible assets that you can hold in your hand. That makes many investors feel secure about their investments.
If you’re an investor looking for alternatives to stocks and bonds, you might want to consider a few of the aforementioned options. It sounds like a pretty clear-cut case, but what most people don’t realize is that there are dozens of investment assets out there.
A lot of these can be just as lucrative as stocks and bonds, while some have even greater potential. Instead of viewing them with suspicion, you should try to think of them more as an alternative to stocks and bonds.