What better way to plan for the future than to invest money? Wise investments allow you to grow your funds to prepare for retirement or your children’s future college education.
However, in a volatile market, it’s natural to look for alternative investments to stocks to diversify your portfolio. That way you will limit risks while finding new opportunities for growth.
This article will discuss four excellent investment alternatives for you to try. Read on!
1. Real Estate
Real estate is one of the most reliable alternative investment strategies. It is done by buying property. You can buy a house or a duplex and collect rent from tenants. Additionally, the property’s value may rise over time.
You will need money to make a down payment while the bank can help you finance the rest.
However, don’t forget that being a landlord comes with a set of responsibilities. You’ll have to take care of accidents or appliances breaking and will have to find good tenants.
If you don’t want to have to deal with all that, it is possible to hire a property manager; but of course, that will cost money.
2. Precious Metals
Precious metals are one of the top ways to invest reliably and a great way to diversify your portfolio. It’s a common strategy to hedge against inflation.
While gold is the most popular precious metal, other options such as silver and platinum are not without merit. Each metal investment presents its own set of opportunities and risks.
You don’t need to own large quantities of the physical metals, as you can access precious metal investments through derivative markets and metal ETFs among other possibilities.
3. Peer-to-Peer Lending
With peer-to-peer lending, you offer loans for businesses or individuals through online services. You might join a pool of other investors making a loan to a specific project.
You’ll receive a set amount each month that includes interests. Peer-to-peer lending can offer better returns than standard savings methods.
One of the biggest risks of peer-to-peer lending is that the individual you’re lending to defaults. It’s up to you then to assess the parameters that you judge safe enough to lend your money.
Crowdfunding gives you the opportunity of purchasing equity in other businesses. Startup companies may have great ideas but lack the funds to give them life. They’ll give you shares of their companies in return for your investment.
Of course, you’ll be reliant on the company’s success. If they are successful, you’ll partake in their profits, and if they fail, you’ll lose your investment.
The good thing is that you don’t need huge amounts to start with crowdfunding; a few hundred dollars may be enough to get in on a promising project.
The Best Investment Alternatives
When it comes to investing, it’s important not to put all your eggs in the same basket. Investment alternatives are there to diversify your portfolio.
Some of the best alternative investments can include classic values such as gold and real estate, but also newer strategies such as peer-to-peer lending and crowdfunding.
Browse our Personal Finance section for more tips on how to manage your money.