Alternative Investments to the Stock Market
Investing in stock is not everyone's cup of tea. Finding the best alternative investments to the stock market for your financial future is easier than you think.
From real estate to precious metals, there is an investment opportunity for everyone. Depending on the opportunity you're looking for, it is important to be knowledgeable in exactly what you're making an investment in.
Investing in stock is not everyone's cup of tea. But finding the best alternative investments to the stock market for your financial future is easier than you think. These are the top ten options to create a positive investment in your life.
As one of the most stable ways to secure a successful financial future, real estate is one of the top alternative investments to the stock market. The original way to invest in real estate is to buy rental property on your own. This can provide reliable income, that is if you find loyal tenants.
The real estate market crash in 2008 left investors nervous to trust the opportunity, but investment groups are still a popular and low-risk method for investing in real estate, especially while prices are still low. Investment groups offer the opportunity of individual investors to contribute money to a company that buys property.
The final way to invest in real estate is to buy shares in a real estate investment trust, or an REIT. This option allows for a hands-off approach to the investment, while still providing income to the shareholders. They will pay out regular dividends, and it is very similar to investing in stock, and diminishes the role of being a landlord, while still owning a share of the property.
Another great way to get started with real estate investing is with an app right on your phone. Access Invest is a private equity deal aggregator, which allows you to find new ways of crowdsourcing, specifically real estate, if this is what you're looking for.
The app also allows you to search hundreds of debt and equity crowdfunding platforms, like startups, niche market, and alternative asset investments.
Rather than beginning your own business from scratch, angel investing is one of the best alternative investments to the stock market. Also called silent partnering, considering an investment with a small existing business is a great possibility to grow financially.
In exchange for ownership equity or convertible debt, an angel investor will provide capital for a start-up or business that is looking to expand. Becoming a silent owner of the business is more profitable than making a loan, and will entitle you to a percentage in the company.
This is especially possible to make a great deal of money if the business is sold, as your equity stake will pay off.
US Treasury Securities
US Treasury Securities are debt obligations of the United State's government, this can be anywhere from bills and notes, to bonds. Bills are securities that mature around a year or less, notes have a maturity of two to 10 years, while bonds have a maturity of over 10 years, all the way to 30.
So in simple terms, bills have the lowest interest rates, notes have a middle ground, while bonds carry the highest interest rates.
However, it must be noted that investing in Treasury Securities will not result in you becoming rich. Instead, it is a process that is used by many who are looking to protect their money, especially during stock market turmoil.
Next on our list of the best alternative investments to the stock market, investing in resources is typically long-term, due to the unpredictability of our world's environment. Fossil fuels like coal and oil as well as crops and livestock can be invested in within the commodities market.
Investing in crops can be positive due to the unpredictability of weather, for example, a drought. This could result in a certain crop skyrocketing in demand. However, the opposite could also happen, while a large surplus could result in the market falling.
This is the large reason why the investment process of commodities is often long-term, due to the rise and fall of the market. What's a safe way to invest in these resources? Buy into exchange-traded funds.
These are mutual funds that invest in a commodity business, resulting in a safe investment such as several different commodities, rather than just one.
Another type of commodity investment are precious metals. The main precious metals that people invest in are gold and silver. Two other investments that can be made in precious metals are copper and platinum.
Many invest in these metals due to the fact that the value of the dollar continues to decrease. This way, your portfolio will retain its value and remain balanced, despite the risk of deflation in the economy. Two other investments that can be made in precious metals are copper and platinum.
The main conversation that is being had about precious metals has to do with gold specifically, the most popular precious metal in the world. This is because it has two roles, one as a financial application, the other being an industrial use.
Investing in gold with an allocation of five to 10 percent is the most reasonable way to remain safe and stable for your portfolio.
Private equity investing is a way to raise funds to develop new technology or products, as well as expand the working capital and strengthen the balance sheet of a company. Investors or private companies may invest in private equity, and as one of the top alternative investments to the stock market, this is a very high-risk choice.
Due to the fact that the world of private equity is very limited, many starting investing can reach up to $250,000 or more, typically done by a private company.
However, private equity is on the upswing, and has been since the 2008 crash. Some popular companies that have received funding through this process include FedEx, Intel, Cisco Systems, and A&W Restaurants.
With a similar reasoning to invest in gold, but a much different end of the spectrum, investing in cryptocurrency to hedge your net worth against the decline of the dollar's worth is a popular method.
Another reason to invest in cryptocurrency is due to the technology aspect of the process, thus supporting the social vision behind the investment.
Some cryptocurrency to consider is Bitcoin, Ethereum, Ripple, Litecoin, Monero, and Dash. To have a Bitcoin means that you have a share in Bitcoin's venture.
Anything from art to coins to antiques, investing in collectibles is one of the best alternative investments to the stock market. Though you can't just invest in anything, and having the knowledge of what you are buying will result in the quality of your investments.
When done correctly, investing in popular collectibles is a great way to ensure that today's collector's items turn into tomorrow's paychecks. And rather, the market runs on the buyer's willingness. And much like precious metals, collectibles can be profitable during dollar weakness.
Next on our list of the best alternative investments to the stock market is the build your own CD (certificates of deposit) ladder. Another option that won't result in getting you rich, but rather improve the returns on the portion of your portfolio that features your fixed incomes. CDs are safe to create because they are held by banks, this way you are insured by the FDIC.
In simpler terms, using a CD ladder is a great way to protect your money during high volatility in stocks. Like most investments, the long-term CDs will pay higher rates of return.
Last, but certainly not least, on our list of the best alternative investments to the stock market is peer-to-peer lending. This is a popular method because the process benefits the investor and the borrower.
As a way to eliminate the middleman, or the banker, peer-to-peer lending will typically result in a higher rate of return to the investor. An investment that only requires as little as $25, repayment of the loan is much more probable in an investment like this. Plus, you can use platforms like Lending Club, which will spread your investment over multiple individual loans, this way the risk of loss is lowered.