5 Alternative Ways to Invest
November 2, 2022 (Investorideas.com Newswire) The stock market is often the first thing that springs to mind when the subject of investing is brought up. In particular, buying stocks in publicly traded companies has been the bread and butter of many investors' portfolios.
However, did you know that there are other ways you can let your finances grow and prosper? These alternative routes can be just as profitable, if not more so. In some of these investment methods, you don't even have to talk with a broker to get started on growing your net worth.
If you're aiming to diversify your investment portfolio, read on to learn about five legitimate ways you can invest your money that doesn't involve the stock market.
1) Real Estate
Land is a hot commodity, and this is especially true in areas that are growing commercially. If you have the capital, real estate is a potent investment vehicle since it offers both the potential for capital appreciation and rental income.
A home, duplex, or other multi-family building such as an apartment building can be rented out to provide a monthly or annual income. And, if the property is situated in an appreciating area, you may be able to sell it later on for a much higher value.
That said, it's important to remember that there are risks involved with any type of investment, and real estate is no different. For instance, the value of your property could drop in a housing market downturn. Additionally, you'll be responsible for maintaining the property and finding tenants, which can prove to be time-consuming.
One way to mitigate this is by hiring a property manager to oversee the day-to-day tasks. While this will come at an additional cost, it'll give you peace of mind knowing that someone else is handling the nitty-gritty details.
Over the past few years, cryptocurrency has become one of the most popular alternative investments. Unlike stocks or bonds, digital currency isn't regulated by any government body or financial institution. Bitcoin, Ethereum, and Cardano are a few examples of cryptocurrencies that have gained mainstream adoption.
Investors are attracted to cryptocurrency for several reasons. For one, it's seen as a way to hedge against inflation since there's a finite supply of most digital coins. Additionally, crypto can be bought and sold 24/7 since it's not tied to any physical location or stock exchange.
However, there are also some very notable downsides to investing in this type of currency. For one, there is a multitude of scams and frauds associated with digital coins. Additionally, the value of cryptocurrency can be incredibly volatile, meaning you could end up losing a significant amount of money if you're not careful.
Proceed with caution if you're interested in investing in cryptocurrency, and make sure you do your research before choosing the right crypto exchange. Read more about decentralized crypto exchanges here.
Gold has been used as a form of currency and a store of value for centuries. Its popularity stems from the fact that it's a physical asset that can't be reproduced or inflated. This makes it an ideal way to preserve your wealth over time.
Investors typically purchase gold as a hedge against inflation, since the metal tends to hold its value even when other asset prices are dropping. Gold can be bought in the form of bars, coins, or bullion.
However, it's important to remember that gold is a speculative investment, which means it can be quite volatile. Investors say that a 5-10% allocation to gold is a healthy amount when diversifying your portfolio and reducing risk.
4) Equity Crowdfunding
Equity crowdfunding is a relatively new way to invest in early-stage companies. In a nutshell, it allows you to pool your money with other investors to finance a startup. If the startup scales and succeeds, you get a share of the profits relative to how much you invested in them.
This type of investment is often seen as riskier than traditional equity investing since the businesses you invest in are less established than blue chip companies. However, it also has the potential to provide higher returns if the startup is successful. This is because you're chipping in on a potentially blossoming business at an early stage.
Some popular platforms that offer equity crowdfunding include Seedrs, AngelList, and Wefunder. You can invest in them with as little as a hundred dollars and reap the rewards if the startup hits it big.
5) Fine Art
Want to surf the highly volatile tides that is fine art? Turns out, you can. And you don't even have to be a highly proficient painter to do so.
Fine art collecting may seem like a luxury reserved for the 1%, but it's actually quite accessible if you have the means. You can purchase artwork through an art dealer or gallery, or even online through auction websites.
The price of art swings wildly depending on the piece and the artist, so it's important to do your research before buying anything. Be sure to do your research on how to best store your art, as it can be damaged and lose value if not kept in the proper conditions.
Moreover, be aware of fake replicas circulating in the art world. If you're interested in investing in art, be sure to educate yourself on the market and only purchase pieces that have gone through rigorous authenticity checks.
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