John

Alternative Investments to Park Your Money


If you are thinking of finding other investments that can diversify your portfolio, or if you just want to veer away from the stock market, you may check out the following investments.

Federal Bonds

The US Treasury and Federal Reserve can be very welcoming when it comes to you bringing your funds to them and they’ll issue security for you. This security is also very safe. In general, a US government bond is qualified as risk-free security.

On the flip side, many individuals and institutions have already entered the bond market, which sports bid bond rates to very low levels. During early January 2019, the yield from a 10-Year Treasury Note was somewhere around 2.730 percent, which is really near a record low.

Real Estate

During tumultuous times for the banks and the stock market, the appeal of real estate investment can be strong. You can be a landlord. Spend some of your principal on a certain property, fix it up, rent it out, and let your tenants pay off the mortgage.

If you can do it right, real estate can have a huge financial advantage. However, it can also be very risky and sometimes it becomes fickle.

Residential and diversified real estate investments have averaged about a 10 percent return in the past 20 years and this is a tad better than the S&P stock index during that same timeframe. But real estate can also be an unreliable investment, particularly during the short term.

Precious Metals

In the worst-case scenario for the financial markets, gold, silver, and other precious metals like platinum or copper will still retain their value, if not go up.

The possibility of having to return to a barter system with physical goods is minimal, but it may probably make sense to hold a certain percentage of your assets in this form.

For one, precious metals have historically offered a low or negative correlation to other asset classes like stocks and bonds. That means when those investments fall down, the metals are not likely to follow suit. They may even increase in value.

Luxury Assets

These tangible assets include fine art, cars, diamonds, watches, and another jewel, and pretty much anything of value that qualifies as a collectible. These are things that can be touched and seen, compared to a bank account statement that could be difficult to collect on if the financial institution that housed it doesn’t exist anymore.

However, luxury assets are quite difficult to be sure about. Although the data on their historical returns are difficult to find, they are widely thought to have lagged stock market returns while having periods of quick appreciation due to either strong financial market performance or periods of popularity. This increases the underlying demand and prices.

Cryptocurrencies

Cryptocurrencies are another alternative investment option. You have a number of choices, among which Bitcoin is among the most popular option. The so-called “cryptocurrencies” provide individual investors a unique chance to get into what is still very much an emerging technology.

In the same breath, this is also a high-risk, high-reward opportunity. For instance, after soaring super high, bitcoin dropped three-fourths of its value in 2018. However, most analysts believe that these cryptocurrencies are here to stay.

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