Alternative investments are not like your everyday investment. They are not so liquid and don’t materialize as quickly as the conventional types of investments. Nonetheless, alternative investments are slowly becoming more and more popular by the day. Any investment that doesn’t fall under bonds, cash, or stocks is an alternative investment.
Most financial experts will tell you that alternative investments are particularly great for diversification. You are supposed to mainly depend on them as your diversification tool for financial portfolios. Thus, instead of putting all of your investment in the traditional assets, you can venture into some alternative investments. So, what are some of the assets that fall under the alternative investments? Well, here are 6 that you can consider investing in:
Historically, art has been one of the most sought-after items in the world. In most cases, it is the affluent and wealthy members of society that invest in expensive art pieces. Fine art can be a great investment for you to make. The good thing about art is that its pricing doesn’t fluctuate as much as the traditional forms of investment. In fact, it has been steadily rising in value at an average of 10.5% annually.
Nonetheless, art has its distinct shifts that can make it risky as well to invest in. It also depends on the type of art that you’re interested in, as this will determine how much you’re going to spend.
Buying automotive machinery is one of the most volatile investments that you can ever make. It is not only unpredictable, but it also has a host of natural disasters and world events that may impact them. These natural happenings may impact both the price and security of the assets.
Let’s say you purchase a vehicle and then a weather catastrophe occurs. There’ll be damage to it, which may either render it useless or lead to some expensive repair costs. However, for such assets, you can also take up an insurance cover for them.
This is another risky, yet quite profitable alternative investment that you can make. The rise and popularity of cryptocurrencies is evident with the presence of bitcoins and the rest. Investing in cryptocurrencies can be quite profitable if you do it the right way.
However, cryptocurrencies still carry an evident risk whenever the market changes. There are fluctuations, just like there are when you’re investing in any other type of business.
Investing in jewelery is wise and smart to do when you know where to get it from. You also need to analyze and understand the market well before you get so engrossed in the business.
In this field, you also have to be careful to ensure that you don’t get short changed when purchasing jewelery. You can easily purchase fakes thinking that you’ve gotten the right set of jewelery items.
There are different types of jewelery that you can invest in. For instance, you can invest in both diamonds, and its alternatives like moissanite. This can be a worthy investment if you’re smart and patient. The market changes and sometimes you may have to hold back your jewelery items until it’s the right time to sell them.
Otherwise known as venture capital, startups are a great way to invest your money. Have you ever watched the American TV show Shark Tank? Or the British TV show Dragon’s Den? Both of them show you how investors put in their funds in startup companies and even established ones, in a hope to gain profits/returns later. Startup owners head in and pitch their business ideas in hope of securing deals with the investors.
Investing in startups like in the above cases involves financing the initial stages of a business. Later on, you can recoup your investment when the company issues stock, or when another business comes and takes it over. The return on investment for startups doesn’t usually come by until about ten years or so, if at all the business is successful.
Because of the stage at which you make an investment, these kinds of investments are normally considered very risky. However, if you spread your capital across different startups, then you can reduce the risk by a great margin.
These 6 assets above are great alternative investments if you’re looking for some. However, you need to make smart and calculated decisions due to the risk that’s in bay.
You may be interested in: How to Keep Your Startup Protected