There are many alternative investments that result in high yields. Many investors don’t feel as comfortable with them because they’re not as common as traditional stocks. However, alternative investments often have lower correlations to the stock markets. As an investor, making some alternative investments protects your portfolio from broader market fluctuations. For instance, you might diversify your portfolio with an oil business investment. Read on to discover the five best alternative investments for high yields.
Investing in fine arts is a more traditional investment that’s much less affected by market fluctuations than others. Since art and its prices are so abstract, they’re not impacted by the ups and downs of the market as much. In fact, art values and prices have steadily increased over the past decade. However, the art sector and stock market do go through shifts and fluctuations, just not at the same time as the rest of the market. Surely, investing in fine arts provides protections against most market fluctuations, but requires some evaluation first.
Cryptocurrencies are another prudent alternative investment opportunity. Since cryptocurrencies aren’t backed by US banks or financial institutions, they are incredibly volatile. Additionally, few people know how to price it properly or what it’s really worth. This contributes even more to its volatility. Therefore, cryptocurrency wallets provide significant high-yield potential. Absolutely, cryptocurrencies provide massive volatility and yield potential, but require prudent evaluation and monitoring.
Purchasing real estate and collecting rent is an additional high-yield investment opportunity. By simply making a down payment and having the bank finance the rest, you collect rental income from tenants, as well as appreciation from the property. However, there are many headaches landlords must deal with, such as repairs, maintenance, and late/non-paying tenants. Avoid these responsibilities by hiring a property management company to act as a middleman between yourself and your tenants. Additionally, form a partnership with similar investors to purchase and manage properties together. This way, the risks are spread between all parties, and you may enjoy the benefit of someone more knowledgeable about real estate. Certainly, real estate is a great alternative investment for high yields over the long term.
Gold is an investment alternative that maintains monetary value. In fact, many investors own gold as an insurance policy against the fluctuations of the traditional market. Gold investments also hedge inflation, because its stores value that rises as prices rise. This way, the value of your gold investments are protected from inflation. Additionally, gold investors benefit from the quick price rises of the metal, which are often difficult to directly capture. To maximize the benefits of gold investments, buy physical gold instead of gold-backed ETFs. Definitely, gold is an alternative investment that secures and retains value in spite of market prices.
Peer-to-peer lending (P2P) is an alternative investment that allows you to loan another person money. There are several platforms where you can participate, and get returns on your investments. Many of these P2P platforms connect borrowers and investors directly, eliminating the need for a bank. Depending on the loan types you distribute and the risks you take, your average returns should be around 4-8%. Of course, P2P lending is a great simulator for testing investment and diversification strategies.
There is a myriad of great alternative investments with high yields. One such investment is in fine arts, which are so abstract that their prices are less affected by market highs and lows. Cryptocurrencies are another, and are incredibly volatile. Investing in real estate provides significant returns over longer time periods. Gold ensures your investment retains its value, even if the market crashes. Finally, peer-to-peer lending provides returns without involving banks, making them great testing beds for diversification and investment strategies. When wondering about the best alternative investments for high yields, consider the investments described above.