Stock market crashes are more common than you think. A crash is defined simply as a day when the market drops at least 10%. And that can happen for any reason – pandemics, the bursting of a speculative bubble, panic selling, and more.
While the markets usually recover, that can take weeks, months, or even years. In the meantime, you’ve lost money and can be struggling financially.
That’s where alternative investments can come in. An alternative investment can provide you with peace of mind, even when the stock market can’t.
How? It helps you diversify your financial portfolio. Even if the stock markets were to crash, you could still fall back on your alternative investments.
Not sure where to invest? Here are 4 alternative investment ideas you need to consider.
A commodity is a raw good. When investors talk about commodities trading they are talking about buying and selling raw goods and materials in bulk.
Commodities can be either hard or soft commodities depending on how they are sourced. Soft commodities include livestock and agricultural products such as beef, live cattle, coffee, corn, soybeans, and lumber. Hard commodities include precious metals like gold, industrial metals like copper, and additional commodities like crude oil and coal.
Due to supply and demand, the price of a commodity can fluctuate wildly. That’s why they are often traded through futures contracts, which state that you agree to sell or buy a commodity for a set price at a set date.
Commodities can either be invested in through futures contracts via brokerage accounts or via stocks of companies that make them. Some commodities, like gold, can easily be directly invested in and bought. However, you may need to safely store it yourself.
Collectibles is a pretty broad category. Collectibles can encompass anything from sports cards to stamps to coins.
Investing in collectibles means holding on to them in the hopes that their value will appreciate over time. They are almost always long-term investments.
However, the collectibles market can be very risky. There is no guarantee the assets will appreciate over time. In addition, they can easily be damaged or destroyed due to a natural disaster.
Still, many people like to invest in collectibles since they can be more fun and interesting than other investments.
Cryptocurrency, or crypto, can be a very volatile market. It’s unregulated and relatively new.
While Bitcoin is the most famous cryptocurrency, there are plenty of others such as Fantom, Ethereum, Dogecoin, etc. There are several online exchanges you can use to buy Fantom or other cryptocurrencies.
Despite the risk, they can be part of your investing strategy. You just need to do your research and invest safely.
4. Peer-To-Peer Lending
Finally, you can consider peer-to-peer, or P2P lending.
P2P lending is simply loaning money to another person. Fortunately, you don’t have to look very far for potential investments. There are online platforms that allow you to fund loans.
Consider These Alternative Investment Ideas
Alternative investment options can help you create a diversified portfolio. If you want some additional peace of mind and financial security, this is absolutely the way to do it.
If you liked this article on alternative investment ideas, be sure to check out more articles in our Blockchain and other categories.
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