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These 10 Alternative Investments Are on Every Investor’s List in 2023

These 10 Alternative Investments Are on Every Investor’s List in 2023

When discussing investing, most people immediately think about buying stocks and options. Now, most investment guides suggest that you should diversify your portfolio. Many people interpret this as just buying different stocks or stock types.

The problem is that the same economic forces often govern the same asset types, so most will move in the same direction when the market starts booming (or crashing).

So, to truly diversify your assets, you need to put your money into something completely different. Ideally, you want something that moves against the market or is completely unaffected by it (like art or collector’s items). With that in mind and without further ado, here are the top ten alternative investments on every investor’s list in 2023.

1.  Art

Imagine buying Van Gogh’s painting while he was alive, waiting for his popularity to skyrocket, and then selling it for $83 million. This is an unlikely scenario, but some appreciation is more than expected.

If you understand art, follow the latest art movements, and have acquaintances in this field, you’ll find that predicting future trends is easier than predicting the market.

This is also a portable asset you can sit on (or hang on the wall of a property you own). You’re not planning to sit on it for generations, so you won’t need any special conditions to keep these art pieces in mint condition.

2.  Peer-to-peer lending

This action is unique on this list, which makes it a unique form and format of diversification.  Depending on the amount of risk you’re willing to take, finding a P2P lending platform and a few borrowers can be incredibly profitable.

Due to the nature of these platforms, you’ll get a great insight into the performance of your assets. This level of control and transparency is unlike any conventional investment options offer.

Modern evaluation algorithms make assessing a potential lender’s creditworthiness more reliable than ever.

3.  Altcoins

Even if you want to invest in crypto, you don’t have to go for Bitcoin or Ethereum. Instead, there are many different altcoins to invest in. You should check them out and see if they are to your liking.

The thing is that it’s always smart to diversify your resources, and crypto is a great way to do so. Due to its volatile nature and revolutionary concept of relying on decentralized finance, its trend (of growth or decline) will not necessarily move with the rest of the market.

Sure, as your main investment, crypto can be quite volatile and risky, but this makes them ideal as an alternative investment. After all, they give you a chance at a massive turnaround with a small initial investment.

4.  Precious metals

We’ve already talked about diversifying your portfolio, and even the most mainstream guides suggest putting 10-20% of your investment money into precious metals. When people lose trust in institutions (stocks and fiat), they buy gold and silver.

In the era of great political and economic uncertainty (war, banks collapsing, etc.), people put the most trust in assets they can keep in their homes (in a safe) or even pack in a bag and take a plane. Precious metals check all of these boxes.

Other than this, gold and precious metal has to be refined from raw ore, then worked into coins and bullion. The fact that you can’t make them out of thin air means they’re a decent inflation hedge.

5.  Jewelry

Almost every argument we brought up for precious metals also applies to jewellery. In a case of a disaster of massive proportions, you can just pack your jewellery and take it with you.

Since it’s an important and beautiful accessory, you can use it as a part of your outfit. If you keep it clean and well-maintained, it won’t lose as much value as it ages.

Sure, one problem is that, over time, you may grow emotionally attached to your jewellery, which may defeat its purpose as an investment.

This is not the only accessory you can turn into an alternative investment. For a while now, designer bags are also a part of this niche.

6.  Real estate

Depending on the area, there’s a high chance that a piece of real estate you buy might grow in value. This means that by just selling it, you’ll get a far better price.

The main reason why the majority of people invest in real estate is for passive income. Since rent comes in every month (pretty reliably), this may also be a great way to improve your cash flow.

Most importantly, this is an asset with intrinsic value. It’s a potential home or a venue that you can get the value out of, even outside of generating profit. Owning real estate is a boon to your financial status and stability by default.

7.  Farmland or timberland

You don’t have to buy residential or commercial property to get your money’s worth. Like with real estate, farmlands, and timberlands are assets with intrinsic value. Even if you’re not drawing profit from them now, there’s room for this to change.

You can rent them out or, if you undergo a change of heart, retire to the farm side and start engaging in agriculture.

Due to the rapid urbanization of our world, you would be surprised at how cheap you can get impressively large swaths of land. This trend might soon change, so why not buy an asset while it’s cheap and sells it later on when it’s high?

8.  Quality alcohol

Investing in quality alcohol vintages requires more knowledge than most guides would suggest. Ideally, you would be an expert yourself, but seek expert advice if you’re just getting started.

First, there are several factors to consider when investing in quality alcohol. First, you want to understand the type (wine, whiskey, and spirits abide by different market rules). Second, you must look for the right year and producer.

While the content is supposed to be what matters, when approaching alcohol buying from an investor’s perspective, you must ensure it has adequate packaging. Unlike with vintage furniture or other items, you won’t be able to “restore” it. You get what you buy, and it impacts the value quite significantly.

9.  Collectibles

The most interesting thing about collecting these assets is that it’s not just an investment; it’s an incredible hobby. Sure, you’ll be thrilled that the price of silver has dropped so that you can buy more than you intended, but that’s nothing compared to finding a rare coin or book. Speaking of which, some of the best collectible items to invest in are:

  • Coins
  • Classic cars (brand new models aren’t everything)
  • Rare books
  • Sports memorabilia
  • Watches

From this, it’s already evident that not all these items cost the same. Buying a rare coin or book is nowhere near the expense of buying a classic car. Still, some of vintage watches can reach incredible sums.

While this is true in every industry, you’ll have to grow into a real aficionado to make the right choices here.

10. Commodities

Commodities also serve as an inflation hedge. When inflation is high, money loses value, making commodities more expensive.

Unlike money or stocks that can be made out of thin air, commodities are still controlled by the concept of supply in demand. Since supply is not unlimited (while demand potentially is), there’s a great potential for value growth.

Some commodities are great during market volatility. Many people lose their fate in institutions when the economy starts going downhill. This makes them trust more in assets they can hold in their hands, keep in a silo, or store in a safe.

Aside from precious metals (that we’ve already covered), you might also want to consider investing in things like:

  • Natural gas
  • Copper
  • Agricultural commodities (grain, cotton, coffee, soybeans)
  • Livestock

These are just some of the items whose value skyrockets in moments of crisis.

An alternative investment is the best way to truly diversify your portfolio

The value of these asset types doesn’t move with the market (as much), and most of them have an intrinsic, tangible value. The best part is that you don’t have to choose. Why not go for several (or all) of these investments and keep your portfolio diverse?

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