December 12, 2019
If you’ve ever thought that investing in stocks or bonds isn’t interesting enough, then this article is for you. We explore five interesting alternative investments that you can get into.
Why might someone be interested in alternatives? First, they’re unique and exciting options. Second, some can potentially offer your portfolio an added layer of protection in times of volatility.
Investment is a very generic term. Practically anything that you put resources into expecting it to grow can be called an investment. Anything other than stocks and bonds is called an alternative investment.
Since the beginning of civilization, people have been pouring money into a wide range of different things. Some of them more interesting than others. Here are our picks for 5 interesting alternatives:
If you fancy yourself a connoisseur, then this alternative investment might be for you.
The prices of wines can range from your $2 convenience store boxed wines to bottles of liquid gold worth hundreds of thousands.
The most expensive bottle of wine ever was a 73-year-old bottle of French Burgundy sold at $558,000.
Just giving it a quick search online will show you high priced bottles of a specific vintage grown in an exact location in the perfect time of year.
You need to do a lot of research and know the right people to know how much a bottle of red or white is worth. Aside from your own research, you need to have it appraised and sell it in the correct marketplace. Not everyone is in the market for a $10,000 bottle of burgundy red.
Trading rare single bottles can be much tougher than trading wines in bulk. For bulk wine investors, there are a few places you can actually do wine trading online.
The London International Vintners Exchange (Liv-Ex) and the VINEX Exchange are some examples of online platforms where you can trade wine. They allow you to connect globally in real-time within the business to business wine trading sector.
One final thing you have to consider before entering the wine trade is your storage capability. Improper storage can alter the quality of your investment over time, damaging your portfolio.
Art is another alternative investment that requires a great deal of passion. It’s similar to investing in wines in that there’s a large knowledge base that you need to possess in order to know actual values, you need to know the right people to both buy and sell, and you need to have dedicated and secure storage facilities for your works of art.
Unfortunately with art, you can’t buy it by the case.
To invest in art you need to have deep knowledge in your subject matter. You can specialize by choosing a form of art like sculpture or paintings, or by focusing on a specific period in history.
You will also need to make sure your investments are well guarded as history is rife with great capers of fabulous artworks being stolen in the night.
One other consideration, especially with modern art, is having to deal with actual artists, which are a passionate group of people.
The strange thing about the art world is that some works command an unexpectedly high value. You’ll see this most often in modern works where even paintings with only blocks of violet, green, and red can be sold in the multimillions.
But if you know what you’re doing, there’s a huge opportunity in the art trade. The most expensive piece of art is called “Salvator Mundi” which is attributed to Leonardo Da Vinci and sold at a whopping $450.3 million.
Cryptocurrencies, or cryptos, are fairly new in the investment landscape. They’ve been making headlines in recent years because of skyrocketing prices and an intensely volatile market.
There are thousands of options: From the most popular and most highly valued (Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC)) to the most obscure and even ridiculous (Dogecoin (DOGE), Unobtainium (UNO), Dentacoin (DCN), etc.)
In cryptos, when prices skyrocket, they do so with a bang!
For example, in 2017, Bitcoin reached a record high and shot up to $19,500! During that time, bitcoin’s price rose more than 5% in the previous 24 hours and went up 1,824% since Jan. 1 of that year, when a single Bitcoin could be had for just under $1,000. Talk about appreciation!
Most new investors in cryptos are attracted to its massive potential. But unfortunately, this massive potential is only speculation. Cryptos are subject to the highly temperamental market and most are not tied to any real value than what the traders are willing to do transactions at.
But to people willing to ride the rollercoaster of speculation, it can be a fascinating investment at the bleeding edge of technology.
When someone hears that you’ve invested in real estate, the first thing they ask is how much you invested.
When you say “Oh, just $500”, and they don’t understand you, they’ve probably never heard of REITs!
Real Estate Investment Trusts, or REITs, were first created in the 1960s to allow individual investors to earn income through commercial real estate ownership. They’re companies that acquire, own, and operate income-producing real estate assets.
They allow you to own a percentage of properties while lowering the barrier of entry. REITs also take away the headache of managing and operating on your own.
You can also pick what type of asset class you wish to invest in. DiversyFund’s Growth REIT, for example, specializes in multi-family apartment buildings with cash flow. However, you can pick REITs that invest in healthcare, industrial, infrastructure, timberland, hospitality, etc. You name it, there’s probably a REIT for it.
Domain names are both the name and the address of websites. These are what you type into your browser.
They can serve as both the name and the address of a website because each domain name is unique. There will always be one google.com or amazon.com or wikipedia.com. And there’s the opportunity.
The most expensive domain name purchase publicly reported was $49.7 Million for ‘carinsurance.com’. And it’s not alone in that tens of millions range.
Specific domain names can be highly sought after and there are several related strategies.
You can buy new ones.
Although most of the domain names bought on speculation have probably been bought in the .com, .org, and .net extensions, a whole slew of new extensions are now available.
So now you can buy domains like ‘property.expert’ or ‘bit.coin’.
This makes it a lot tougher for speculators to choose a domain with all the varieties available. But you can get clues by looking at the high ticket items in the used domain market.
You can also buy used.
Domains are registered for a fixed amount of time. When an existing website fails to renew the domain name, anyone can fly in to buy the domain name.
Whichever alternative investment intrigues you the most, the number one rule remains true: Always do your homework. If you invest with a trusted partner or invest in something you are truly an expert in, your portfolio will be set up for success.