Modern investors are always on a lookout for ways to diversify their portfolio. Stocks and bonds are the most common type of investments, but they are prone to volatility due to global political and economic instability. The current situation in the world is far from stable and investors are looking for alternatives to stocks and bonds.
No one wants another scenario like the global economic crisis that happened in 2007-08. However, investors are not just looking for an investment opportunity, but for a way to protect their funds and hopefully even turn a profit. Investments that are safe, secure and can easily be turned into cash is what investors today are looking for. That being said, here are a few investment alternatives to stocks and bonds.
Investing in precious metals has always been a popular alternative investment. Silver is the most popular option next to gold. It can serve as a hedge against global instability and inflation. Investing in silver can help you secure your funds for a prolonged period of time. The main reason silver is a good investment is that it pretty much retains its value over time.
Variations in silver prices are not volatile and can even be predicted based on needs and demands, as well as the state of the global economy. Silver is a highly sought-after material due to its special properties and its many uses in various industries. For example, silver is commonly used in medicine, electronics, jewelry, energy industry and so on. Also, silverware is another common form of silver and it’s sought-after by collectors.
Investing in Gold
Gold is a more popular and more valuable precious metal than silver. It’s also the most popular alternative investment to stocks and bonds. Gold has inherited value, as gold has been used by people since the dawn of civilization. It’s an excellent hedge against inflation and a secure investment for your funds. Gold is always highly sought-after and in high demand. Many people buy gold due to its cultural and traditional value, while others buy it for its special properties and uses in various industries.
For instance, gold possesses high conductivity, softness, lack of corrosion and tarnishing properties, all of which make it an ideal metal to be used in many different industries. For investors, gold presents a unique opportunity to ensure their investment’s safety and even turn a profit, since the gold price is constantly on the rise. You can buy gold bullion, coins, bars and so on.
Invest in Real Estate
Investors are opting for real estate as an alternative type of investment. Buying and selling properties is a good way to secure funds and gain profits. Real estate properties are in high demand, which makes this alternative an excellent method for long-term investments. Buying a real estate property makes you the owner and a landlord. You can gain profits from property appreciation and rent.
Rental income is quite predictable and you’re also entitled to other benefits, such as tax return or tax deduction on mortgage interest, as well as stability. You can own a property or partner up with other investors to manage multiple properties and share expenses and profits. You can also flip properties for profits. The way it works is that you buy a real estate property, invest in renovations and wait for the prices to go up before you sell it.
Venture Capital Investments
Venture capital is a form of private equity investments. It’s also a good alternative to stocks and bonds, although it is a more expensive investment with considerable ROI. Venture capital works in a way where you invest in a startup business whose business idea has the potential to become very profitable in three to five years.
In exchange for financial support, you become one of the shareholders in the company. In other words, once company assets become liquid and reach the stock market, you’ll gain a return on investment. Venture capital is a risk, but it’s a calculated risk that can yield significant profits. Successful companies, such as Google, Facebook and Twitter were all supported by venture capital investors.
Alternative investments are sought-after by investors to help them diversify their portfolios and secure their funds for longer time periods. Stocks and bonds are good investments, but they can easily crash if the global economy faces particular difficulties. In order to avoid such risks, investors are opting for more than one investment type.