4 Uncommon Investments You've Probably Overlooked

Stocks make up 60% of traditional investment allocation, according to BlackRock Investments. Traditional investments fluctuate with market volatility that can result from economic and international factors, but alternative investments available to the average investor can help balance this and diversify their portfolios.

Here are four uncommon, alternative investments you may have overlooked.

4 Uncommon Investments

Real Estate Crowdfunding

You can open an account with a real estate crowdfunding platform if you want to invest in real estate but don’t want to deal with managing or being liable for a physical property. A real estate crowdfunding platform offers more real estate opportunities than a real estate investment trust (REIT), another common option. Investors can get passively involved in residential, commercial, and even tokenized real estate, depending on the crowdfunding platform.

Fine Art

Fine art is considered a collectible, and it falls into three categories: architecture, paintings, and sculpture. Collectibles are some of the least likely investments to provide steady, reliable returns. In addition, there’s no guarantee that you can sell them for top dollar or even any dollars if you need to get your money out in a hurry. For example, liquidating fine art generally entails an appraisal and the cooperation of a consultant or auction house, which can take a lot of time. Yieldstreet is a popular platform that can guide you if you think you’d like to try fine art as an investment.

Cryptocurrency

Cryptocurrency is digital currency that’s exchanged and acquired without the control of any bank or government. Investing in cryptocurrency can require nerves of steel and is renowned for its volatility; while gains can be significant, so can losses. Prices can pivot in less than a minute, often based on information that’s circulating in the news or on the internet. This alternative investment may be best suited to an individual whose risk threshold is high and who can actively monitor the fluctuations frequently.

Investing in crypto directly involves buying and selling through an exchange. In addition, you’ll need a digital wallet to hold your units. However, you can also invest in crypto ETFs for those who want crypto exposure but do not want the responsibility of managing and securing it.

Precious Metals

Gold, silver, and platinum are the most common investments in the alternative investment category. They rate favorably as a solid diversification option for hedging against inflation and market volatility. For example, gold rose by 0.4%, silver by 6.3%, and platinum by a significant 12.2% when the U.S. stock market notoriously plunged in 2022. You can purchase precious metals through ETFs, futures, or buy physical coins or bars from an online gold dealer.

You might want to consider these assets if you have concerns about the economy and inflation because they tend to be historically steady and reliable.

Advantages and Disadvantages of Investing Alternatives

Traditional investments aren’t for everyone, and alternative investments come with their own pros and cons.

Pros

• They can provide diversification.
• Their value doesn’t depend on the stock market.
• Many require only passive management.

Cons

• Assets like fine art can be highly illiquid and require long-term horizons to return a profit.
• Others, like cryptocurrency, can be extremely volatile and not suitable for the faint of heart.
• Alternative investments aren’t likely to provide a steady stream of income, such as dividends; you’ll most likely have to wait until you sell to collect on your investment.

The Bottom Line

Investing doesn’t require moving along with a crowd. The most critical factor is that you seek expert advice if these or any other options feel like a good fit for you. Make sure you understand all the ins and outs before you jump in with both feet.