Alternative investments have become more accessible to pension funds, family offices and everyone in between due to their low correlation to stock market performance and potential higher rates of return.
Tax advantages not available with traditional investments may also apply to crowdfunding campaigns. Unfortunately, they tend to be less liquid and regulated than stocks and bonds, which could pose risks for investors.
Art
Alternative investments such as art, wine and other commodities have seen a resurgence in recent years as investors seek to diversify their portfolios. Although these assets carry higher costs than equities, they offer low correlations with the stock market and may help protect against volatility.
Additionally, investing in collectibles like wine and art can act as a hedge against inflation. Historically, these assets tend to outpace stocks during periods of high inflation.
One common way to invest in art is through an investment fund, where multiple people pool their money and purchase and sell artworks together. These funds are relatively straightforward to join and provide a great entry point into exploring alternative assets.
Wine
In a world where stock markets are struggling, astute investors are turning to alternative investments for portfolio diversification. These types of assets tend to be uncorrelated to financial markets and often exhibit good inflation resistance – making them especially beneficial during periods of economic uncertainty.
Fine wine has seen impressive growth over the last several decades. According to Knight Frank’s 2021 Wealth Report, sales of fine wine increased 13% in 2021 and 127% over 10 years.
Investment funds in wine have become increasingly popular, offering returns that tend to be safer than stocks or bonds. Nevertheless, they can be risky investments and may not appeal to all investors.
There are numerous career options in the wine industry, such as production, distribution, sales and hospitality. These positions are available nationwide and require individuals with expert knowledge of wine, who enjoy travelling (often by car), and possess excellent analytic and negotiating abilities.
Real Estate
Alternative investments can be an excellent way to diversify your portfolio and protect against stock market volatility. However, they tend to be more complex and difficult to manage than traditional stocks and bonds.
Due to the current instability in financial markets, investors are seeking out alternative investments that are uncorrelated to those of their peers. Examples include art, wine and gold.
The rise of digital platforms that enable people to invest in these alternatives has made these assets more accessible for Mainstreet investors. These platforms make it simpler for individuals to get started by offering minimum investment levels.
Cult Wines and Yieldstreet require a minimum investment of $10,000 for their wine services. Likewise, their platforms allow investors to invest in art through investments.
Oil & Gas
Alternative investments refer to investments that fall outside the traditional investment categories of stocks, bonds and cash. They offer investors a unique chance to diversify their portfolios and reduce market volatility.
Most investors are familiar with venture capital and private equity as popular investment options, but there is a vast array of other viable alternatives that often go overlooked. These include managed futures, structured non-OTC products, esports, cannabis, cryptos, P2P lending, collectibles, art works, alcohol and other financial assets.
Due to the ongoing transition away from fossil fuel-based energy systems to low-carbon ones, oil and gas companies have been under intense pressure from governments and investors to adapt in ways that promote decarbonization of the economy. This has necessitated a greater focus on non-core areas like renewables and electric vehicles while also stimulating R&D activity within the sector.