In the investment world, it pays off to have a wide range of investments under your belt. The reasons for portfolio diversification are numerous to say the least, with increased capital security, higher ROI, and multiple revenue streams being some of the biggest benefits that an expanded portfolio brings to the table. However, this doesn’t mean venturing from stocks to the forex market and back, this means tapping into the lucrative opportunities of alternative investments.
Alternative investments encompass assets other than stocks, bonds, and cash, and instead focus on various commodities, some physical, some digital, and other that are business-oriented. To become a prominent investor yourself, you should educate yourself on the various investment types as well as commodities that offer stability, growth, and a high ROI in the wake of the growing instability of the stock market. Let’s take a look at the five alternative investments you should take into consideration.
Investing in fine art
Fine art is one of those niche investment assets that the public rarely talks about, yet it enjoys great recognition and popularity with a select clientele. You want to be a part of that clientele, especially if you have acquired a taste for fine artistic pieces over the years. Not only will investing in fine art such as paintings and sculptures help you diversify your investment portfolio, but there is also an opportunity here to produce a substantial ROI, should the pieces prove to be authentic, of historic value, or discovered to have a sister piece.
Granted, fine art investment is not for everyone, especially considering the amount of capital needed to get in the game. Prominent pieces not only move quickly, but they are regularly sold for exuberant amounts of money as well, making it difficult for new investors to obtain the pieces that display the biggest potential. Nevertheless, it’s an exciting prospect and if you’re lucky, a single investment made at the right time can produce an ROI of a lifetime.
Finding stability in precious metals
Trading precious metals is as old of a profession as civilization itself, and for thousands of years, gold, silver and other precious commodities have reigned supreme as the most valuable and safest options for anyone looking to make a profit. Simply put, if you possess a precious metal, you can sell it for a positive ROI.
The unwavering foundation that these commodities have is incentivizing investors to put their capital towards the most valuable of precious metals such as palladium which has become even more lucrative than gold in recent years. Monitoring the opportunities in the precious metal arena can not only help you produce a steady ROI, but also secure your assets in an investment that cannot fail. This is why cryptocurrency investors, for example, are increasingly transferring their assets into the gold, silver, and platinum realm.
Diversifying with real estate
Real estate is another popular investment asset many traditional investors are considering nowadays, what with the rapid urbanization across the globe and the increased need for real estate opportunities in the commercial and residential realms. This creates an opportune environment for new investors to put capital towards real estate development, preferably in a prominent neighborhood that is in high demand.
As with any asset class, finding the best opportunities will require diligent research on your part, and smart investment across the board, as you don’t want to end up with a house nobody wants to buy. Instead, decide on the properties you want to sell and those you want to rent in order to diversify your income streams as well and secure your personal assets. Speaking of, the next alternative investment is all about financial stability.
Making substantial returns on cryptocurrency
Speaking of cryptocurrency, there is no denying that some of the most popular digital currencies such as Bitcoin and Litecoin have stirred up the investment world in the last few years. With promises of sky-high returns to early investors and a seemingly endless world of possibilities on the blockchain, many traditional investors are nowadays looking to make a return of a lifetime in the cryptocurrency arena.
While you shouldn’t dismiss the idea of investing in cryptocurrency, you shouldn’t rush in either without doing your due diligence. The high volatility of the cryptocurrency market begs the need of investors to tread lightly and only invest in ICOs that have a sound business plan and have made adequate progress towards realization. If you do discover the next big cryptocurrency though, you could easily make an investment of a lifetime. This also means that you can lose your capital in an instant, so tread carefully.
As an investor, you should understand the importance of diversifying your portfolio for better career growth, improved cash flow streams, and of course, higher ROIs across the board. With these alternative investments in mind, you can venture into new, exciting markets and perhaps even make an investment that will take your career to the next level.