Investors have unique portfolios that feature their investments, but it can be even more unique once you try other unusual investments.
It can be scary at first, but if you have the mindset of creating a diverse portfolio, it can benefit you in the long run.
You don’t have to stick with the usual stocks and bonds because several alternative investments exist.
You’ll be surprised that this investment can help you reach your retirement goals more quickly.
So if you are willing to take the risk, check out these eight alternative investments that can improve your portfolio.
Farmland
Farmland investment provides a significant value proposition you cannot usually find in other real estates.
In farmlands, you can get consistent growth, multiple income streams, and access to thriving properties.
Unlike real estate investments with stable returns, farmlands can quickly provide an enormous return rate.
For example, if you bought farmland years ago that cost $2,000, its value can rise to $3,000 per acre in the present.
Through this investment, you can earn high ranks for alternative investments with diversity in your portfolio.
It is because farmland provides access to assets that have an inverse relationship with inflation, even within ten years.
You can notice that farm product prices increase when the dollar depreciates because of inflation.
When it happens, your farmland can become valuable because you earn from the harvest.
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Collectibles
Collectibles are items valued by a collector, but because of their rarity, they can become monetarily valued.
These collectibles include trading cards from different sports, lego sets, coins, stamps, cars, and more.
Who would have thought that a piece of card, such as a card, could enter the investment market?
However, collectibles are only for some investors because the returns need to be more consistent and high.
Platforms like Rally.rd have a giant collection of different collectibles that you can invest in.
Cryptocurrency
You may have heard of cryptocurrency for the past years as it has slowly risen to the world of investment.
But this type of investment is not for the faint-hearted because there are a lot of uncertainties in charts.
Some famous cryptos are Bitcoin and Ethereum, but other surging coins lived and died through the trend.
It is hard to predict your returns because who would think your $400 from 2016 could be worth $33,000 now?
Sometimes, your $400 can turn into $0.00003, which is why the risk is uncertain, but the returns are exceptional.
Derivatives
Derivatives are financial contracts whose value relies on an asset or benchmark negotiated between two or more parties.
They can use these contracts to trade over the counter or through an exchange, but they also carry their risks.
The value of these contracts can fluctuate depending on the asset included, but you can use financial security to mitigate risks.
Derivatives also have good returns, especially if you have the knowledge and ability to make wise decisions.
Gold
Gold is an alternative investing method when the stock market is tense and messy.
This commodity provides a safe haven for investors to spend money in order to grow without relying on traditional investments.
Many gold investors protect their investments by putting them in gold, and they see it as a reliable commodity where money grows.
Parking Spots
Parking spots are a real estate investment, but it is not a usual asset to keep in your portfolio.
However, this alternative investment can be incredibly lucrative, especially if you buy a spot in a high-traffic area.
Parking spots are relatively cheaper than residential or commercial properties, so you can buy more than one.
With multiple parking sports, you can put them up for rent for hundreds of dollars monthly.
The more traffic and closer to the city your parking spot is, the higher you can price the rent.
Another advantage of investing in a parking spot is that it doesn’t need intensive maintenance compared to houses.
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Sports Teams
There are a lot of famous people who own a sports franchise, but they usually are members of exclusive clubs.
But if you are an investor who wants to diversify your portfolio with alternative investments, it is still possible.
You can get fractional ownership in various sports teams by investing in the companies that own the teams.
Typically, a professional or major league team will cost millions, but a minor team can cost at least half a million dollars.
You can pool it with other interested investors to shell out less money but more extensive assets.
While most professional sports teams seem lucrative, most owners don’t look at a profit but a value increase.
Private Equity
You can invest in private companies if you have huge cash waiting for investment opportunities.
Private equity can save you the hassle of choosing the right stocks or bonds so that you can minimize risks.
Your funds in private equity can provide a broad scope for your portfolio, from real estate to private businesses.
They all have the same goal of maximizing profit, but they take a long-term approach to be successful.
Hedge funds can look for ways to earn high profits, even with short-term investments.
Organizations that handle these funds manage the money, usually a large number of deposits.
FAQs – Alternative Investments
Since alternative investments are not the usual ones in the stock market, you can create a diverse portfolio.
By building a unique portfolio, you can reduce the volatility of your record, regardless if the stock market itself is volatile.
Some alternative investments also provide tax advantages that can help save more money.
Like any other investments, the return rate of alternative investments is uncertain, but it can be higher.
Some investors with experience building portfolios with diverse investments found better returns.
In a few years, you can find that these alternatives can rise to trillions of dollars, with hedge funds as a good example.
It may be due to the decrease in entrance criteria for mutual funds that some firms establish for alternative investments.
Additionally, many investors are slowly growing fond of diving into new ventures aside from the usual bonds.
Alternative investments can be an excellent opportunity for higher returns and diversification, which benefits your portfolio.
While you get the chance to invest in unique assets, you can have higher return rates and new experiences.
However, you also have to consider the risks that come with them because they can be illiquid compared to traditional investments.
Alternative investments may have higher risk levels than traditional investments, so they may not be safe.
For investors who are not willing to take higher risks, there may be better approaches for your portfolio.
But if you are willing to try, do thorough research on any investment before making final decisions.
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Final Thoughts
These alternative investments offer an unusual approach to making your portfolio unique and diverse.
Just because they are unusual doesn’t mean they are too risky because some can be great ventures.
Before trying something for a long-term investment, it is best to research and find what fits your needs.
