Consider reasons to seek alternative investments today. Diversifying into alternative investments can help investors address some of the risks in…
Consider reasons to seek alternative investments today.
Diversifying into alternative investments can help investors address some of the risks in the stock and bond markets today, including elevated inflation and lower yield due to a low-interest-rate environment. Alternative assets, or nontraditional investments, go beyond stocks and bonds. They may include real estate, physical commodities, private debt and private equity. Although alternatives come with their own risks — such as illiquidity, less regulation and, in some cases, higher entry costs — the risk-return trade-off can be worth it. While some alternative assets are more accessible than others, today’s investing landscape provides opportunities to invest in the private markets, or nonpublicly traded assets. Here are seven alternative investment ideas to consider.
In today’s economic climate, where investors are worried about elevated inflation, you may consider allocating a portion of your portfolio to gold. This asset class is historically known as an inflation hedge, and gold investors may be able to protect their purchasing power since the precious metal tends to return more than the rate of inflation over time. There are many ways to invest in gold, including investing in gold-mining stocks such as Barrick Gold Corp. (ticker: GOLD), Sibanye Stillwater Ltd. (SBSW) and Newmont Corp. (NEM), or gold exchange-traded funds, including SPDR Gold Shares (GLD) or iShares Gold Trust (IAU). You can also invest in physical gold coins or bullion. Gold has low barrier of entry, meaning there is no minimum requirement to start investing in the precious metal. Unlike other alternative investments such as real estate, gold is a liquid investment, meaning it’s easy to buy and sell. You can easily move in and out of gold investments since investors can access it in the public market.
Cryptocurrencies make up a growing market that has a broad appeal to individual investors. The crypto markets can be easily accessed by almost any investor through cryptocurrency exchanges such as Coinbase, Binance and Gemini. Over the past several years, digital currencies have shown little to no correlation with traditional assets, which makes them a suitable alternative investment to achieve diversification, depending on your risk tolerance. Of the different cryptocurrencies on the market, Bitcoin has the longest track record and best brand. As cryptocurrencies like Bitcoin gain widespread popularity, the case for adoption and utility is growing stronger. Bitcoin is also seen as a kind of digital gold, holding a similar type of value to the precious metal. In addition, the blockchain technology that powers cryptocurrency is viewed as the technology of the future that can help innovate and …….