Variety is the spice of life, as they say.
Nowhere is this truer than investing. Putting all your eggs in one basket is a great way to lose everything fast. That’s why you always make sure to diversify your portfolio. Buy a bit in one company, a bit in another, and more in a third, and soon you will find your money working for you. If one should fail, the others are likely to pick up the slack.
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If you’re only making traditional investments, there are many other ways you can invest your cash and bring in more. Today, I’ll share my top picks for alternative investments you should look into in the coming year.
But first…
What are Alternative Investments?
The days of us only investing in the stock market are long gone. The array of things we can invest in has continued to grow with the era and technology, giving us more ways to make our money work for us. Alternative investments are anything that isn’t the traditional stocks, bonds, or cash that we typically invest in.
While the term “Alternative Investments” is very broad, what we generally mean by the term is the following:
- Pieces of Art
- Rare Collectibles, such as stamps or signatures
- Cryptocurrencies
- Farmland and Real Estate
- Antique Jewelry
- Precious Metals
- Private Equity
These are all great ways to diversify your investment portfolio, especially when the market becomes highly volatile.
Of course, you must always be cautious when investing in other assets, just as you would with any standard stock. With that in mind, I have put together some suggestions on what to consider when investing in different assets.
Best Alternative Investments for 2022
1. Pieces of Art
Often, we see fine art as these unobtainable holy grails of wealth, owned only by the mega-rich as a sign of their success. This is not entirely accurate, though!
With a little bit of knowledge about art and art history, you can turn yourself into one of those art collectors and make a bit of cash from it. What’s more, you don’t have to drop a fortune on any old painting. You can invest in fractional shares of fine art through services such as Masterworks.
Be warned, though, that art is very much a long-game kind of investment. Often, a painting or sculpture takes a long time to gain value, which depends on many aspects of the art world that are beyond your control. Be sure to do your research, spend some time on art collection forums, and perhaps even seek a professional for advice.
2. Precious Metals
While currency is always in flux, we can always rely on precious metals. When it comes to less tangible forms of investment, such as stocks or cryptocurrencies, there is a degree of trust that they will exist and retain value. With precious metals, you can hold a solid lump of value in the palm of your hand!
Gold and other such precious metals all retain their value and can be relied on during times of economic strife.
The main precious metals to invest in are:
- Gold
- Platinum
- Silver
- Copper
- Palladium
Note that it takes some careful timing to invest in metals profitably. Generally, the value of the precious metal is at its strongest when currency is at its weakest, so just diving in whenever may not offer a great return.
3. Farmland and Real Estate
Real estate offers several benefits for investment, not just in terms of a simple house flip. While the traditional route of buying a property, fixing it up, and then selling it for a profit is a tried-and-tested form of business, other ways of investing in property can make you money.
For a start, rental homes offer you a regular income. Whether it is just a single home or a whole apartment building, a tenanted property will bring you a monthly wage in the form of rent. This number will grow with the number of properties you own, but so will the costs of running them.
This also extends to farmland, which can then earn through farming. If managed well, pasture and arable land can be great little side-earner. And the best news is that you don’t have to go all-in by yourself! You can invest with others through Real Estate Crowdfunding and Real Estate Investment Trusts (REITs) to communally provide the capital for these larger purchases and business operations.
The downside to consider with this is the degree of taxes involved. Property tax, income tax, and other charges will be required when managing property of any kind, making it a profitable venture only after time has passed and all is in motion. Rental operations also depend on several social and global factors, such as income rates and building location, so a lot of planning will be necessary to get started.
4. Cryptocurrencies
And finally, let’s talk cryptocurrencies. Investing in Bitcoin, Ethereum, Litecoin, or others is the real deal these days.
Many different online wallets and investment sites pop up every year, giving everyone unprecedented access to investments that can earn buyers pennies or thousands over a few weeks. Check out this blog and this one to learn more about different options and principles for investing in crypto.
A few important precautions, though. Remember, this new online form of currency is volatile, often shooting wildly from expensive to cheap very quickly. As such, it can be very dangerous to put all your eggs in one digital coin. Fortunately, you can always work with a cryptocurrency coach to understand which investments will give you stable returns over the long term.
There are so many options available these days to the intrepid investor. No matter your interests, you can find a way to turn a profit. Do your research, get yourself out there, and earn with alternative investing. The upcoming year is the perfect time to broaden your horizons and build wealth in creative ways.
