Building a secure financial future requires investments on your part. You must invest time, money, and care to achieve your financial dreams. Investments come in all shapes and sizes. Many investment options, such as stocks, bonds, and mutual funds, are known by one and all. Others, though, are not as widely known and understood. These are some of the other investment options you should consider for diversification within your portfolio and other opportunities to accomplish your short- and long-term financial goals.
Real Estate Investing
For a long time, real property has been considered a relatively safe investment option. While no investment is entirely risk-free, the strategies for investing in real estate have evolved since the market downturn of 2007-2009, followed by a period of recovery and innovation. Investors can opt for various real estate investment avenues, including direct property ownership, real estate investment trusts (REITs), real estate mutual funds, and crowdfunding platforms.
Commodities Investing
The term “commodities” refers to raw materials. In an investment medium, it refers to a wide range of products, including the following:
- Gold
- Silver
- Precious metals
- Oil
- Grains
- Animals
- Currencies
Commodities markets represent products and goods that experience nearly perpetual demand (people always need food, for instance). Commodities are excellent resources for balancing portfolios and can easily be purchased through mutual funds or ETFs (exchange-traded funds) that focus on commodities. If you’re looking for investments to help buffer your investments against the ravages of inflation, commodities are good bets as the prices rise and fall along with the standard rules of supply and demand. Just remember that balance and diversification are essential when investing.
Cryptocurrency Investing
While cryptocurrencies are no longer completely new to the investment scene, they still represent a fresh alternative for those seeking diversification and investment opportunities. Despite being risky, digital currencies offer a departure from traditional investment routes, potentially generating passive income for investors who can tolerate notable volatility.
Precious Metals Investing
You've likely encountered numerous advertisements and commercials promoting the substantial benefits of investing in precious metals such as silver, gold, and platinum. You might fear that it's too late to seize this opportunity. Still, the precious metals market remains a viable option for prospective investors. Although the returns might not match those enjoyed by early and long-term gold investors, you can still realize profits through various avenues, including bullion, certificates, futures and options, mutual funds, stocks, commodities, and ETFs.
Art & Collectibles Investing
Investment in art and collectibles, one of the most subjective domains in the investment world, commands a significant market. The category of "collectibles" encompasses a broad array of items, including:
- Musical instruments
- Toys
- Memorabilia
- Coins
- Stamps
- Sports cards
- Automobiles
- Comic books
- Rare books
- Athletic shoes
- Board games
Investing in such items carries a risk due to fluctuating public interest; today's highly valued items might depreciate swiftly, relegated to everyday items in garage sales, given shifting tastes and historical contexts.
Options and Futures
For more advanced investors, options and futures represent high-risk investment options with potentially high rewards. However, the risk of these investment options is considerable. Special accounts are required to make these trades, which are highly speculative but offer the possibility of outstanding returns on your investment in exchange for the risk.
Private Equity and Venture Capital
People often use the terms private equity and venture capital interchangeably. However, while venture capital investments typically target early-stage startups that fall under private equity investments, private equity also encompasses growth capital and buyouts. Besides offering financial backing, many private equity investors contribute their expertise and guidance to help the companies they invest in flourish, securing sustained profitability for themselves.
Alternative Investments in Your Portfolio
This particular list of alternative investment options for your portfolio is hardly inclusive. Other opportunities to invest, diversify, and profit remain, including private debt lending, crowdfunding (peer-to-peer lending), hedge fund investing, structured annuities, and more. Some people find these investments appealing because they face fewer restrictions and regulations. However, many of them carry a greater degree of risk in exchange for the lighter regulatory requirements. Keep that in mind when making investment choices.
Takeaway
With so many investment options available to consumers today, there is no reason you can’t begin taking small steps to diversify and strengthen your investment portfolio – no matter how small your investment budget. These ideas should help you find a place to begin.