5 Common Alternative Investments You Should Know About

With the growing instability of the stock market, investors are searching for new, safer, alternatives to invest their money into. By some expert accounts, this is actually a wise choice due to the fact that another stock market bubble can burst at any moment. Because of this imminent threat of another financial crisis, no wonder people are flocking to alternative methods to diversify their investment portfolio, after all, you shouldn’t put all of your eggs into one basket, right? But what are these alternative investments actually? Well, they are investments in assets other than your classic stocks and bonds or cash, and they are becoming increasingly popular with not just the full-time investors, but with the ordinary people wanting to invest their hard-earned money elsewhere. So, without further ado, here are some five most common alternative investments you should be looking into.

1. Real Estate, Real Simple

Real estate is certainly one of the most common alternative investments out there. In fact, it is so common that probably everyone, at least once in their lives, invests in real estate to acquire a nice home for themselves. A recent report from FNMA, suggests that 85% of millennials think real estate is a good investment and 55% want to invest in the same. And who can blame them when it is one of the simplest ways of investing money by far, and a lot more predictable than the stock exchange. Once you acquire your initial real estate, you can then loan the place or invest some more money into it and sell it for a higher price. Next, you purchase some more property and repeat, you get the picture; it’s that simple.

2. Fine Art for a Fine Investment

Apart from being a good portfolio diversifier, art is similar to real estate that its value can increase drastically over time. As Daniel Gross reports, the value of art pieces increases annually by around 10%. Just to give you an example: originally, Van Gogh sold his Vase with Fifteen Sunflowers for around $10, in 1987 it was sold for around $25 million, today the price of this painting has almost tripled and continues to rise. Missing collection pieces could also cost more than the entire collection combined. Of course, not everyone can invest in such expensive pieces, but there is surely a piece of fine art out there for everyone’s budget, just waiting to be purchased.


3. There’s Gold in Them Thar Hills

Gold is just one of the precious metals you could be investing into. Other precious metals include silver, platinum, palladium and so on. However, the yellow metal has always been the most sought after, especially in cases of political and financial instability. Inflation, for one, has seen a lot of people getting their hands on a gold bullion or two to diversify their portfolio in the case of another financial disaster. The demand for these is extremely high due to their relative liquidity, compactness, and the low manufacturing and distribution costs. Therefore, investing in the king of metals is almost a no-brainer.

4. Cryptocurrencies for a Modern Investor

Cryptocurrencies are without a doubt the newest craze in the investment sphere. The most popular cryptocurrency, bitcoin, has an estimated worth of over six thousand dollars per coin. This is why the only real downside of this form of investment is the increasing cyber-attacks going on in today’s world. Such attacks are a real threat to cryptocurrencies, and finding a reliable and secure cryptocurrency could pose a challenge for new investors. Nevertheless, one should keep a close eye on them in the near future.


5. Private Equity and Venture Capital

Private equity is an umbrella term for all the different investments in the private capital market. One of them being venture capital which, simply put, means investing in new emerging companies still in their growth-stage in order to get a return on investment once they’ve fully grown in size and value. For example, Peter Thiel initially invested $500,000 in the development of Facebook. Later this sum amounted to a staggering $1 billion in cash once he sold off most of his stakes. This prime example just goes to show how worth venture capital can be in comparison to some other methods of investment.


In conclusion, the general rule of thumb is not to invest all of your capital into only one thing, but to diversify your portfolio as much as possible. In the case of the value of one of your investments dropping, you’ll have another investment stepping in as backup. This way you’ll protect yourself from a possible financial fiasco. Be smart, and stay on the safe side with these alternative investments.