Alternative investment ideas for 2021
You might be wondering the best ways to diversify your investments — and the answer might surprise you. Instead of opting for traditional options, why not explore alternative investment ideas that will likely bring you amazing returns?
Expanding and diversifying your investment portfolio is never a bad idea. But instead of opting for ETFs, stocks, bonds, and other traditional investments, have you tried thinking outside the box?
There are tons of under-utilized or little-known investment options out there to improve your returns, hedge against inflation, and create an investment portfolio that delivers you impressive returns through less traditional avenues.
Here are four alternative investment options you can try today to bolster your portfolio.
As wine ages, it increases in value, making it a smart alternative for new investments. Over the past 15 years, the wine market has delivered 13.6% annualized returns, which means it has outperformed both global equities and ETFs over the same time period.
You can invest in wine a few different ways. You can either physically purchase wine or tap into wine’s value by investing in blue-chip wine stock.
If you’re interested in investing in wine can do so through a few different outlets:
- Wine stocks like Diageo, Truett-Hurst, and Constellation Brands.
- ETFs that include wine and alcohol, like the Vanguard Consumer Staples ETF or AdvisorShares Vice ETF.
- Purchase and age the wine yourself.
Another option is to find a wine investment company, Like Cult Wines or Cru Wine Investment, that will do all the legwork and wine storage for you. No need to make your own wine cellar and managing the upkeep on your own.
After about five years, your wine generally will begin to appreciate in value. A few key factors impacting a wine’s value, include:
- Critics’ rating
- Pedigree (where it comes from)
Unsurprisingly, the rarer and more well-regarded the wine, the more it increases in value over time.
Though traditionally an inaccessible investment, modern alternative investment platforms are making it easier for the average investor to buy into things like farmland.
As the volume of national farmland shrinks, it becomes more valuable. The asset has shown positive returns every year since 1990 — having a higher growth rate than commercial real estate, gold, and government bonds. For example according to AcreTrader, $10,000 worth of farmland in 1990 would be worth nearly $200,000 today!
Farmland returns have historically been very stable with a slow, upward trajectory, making it a great long-term investment. It is fairly low risk, uncorrelated with major markets, and has a 3–5% yearly estimated yield.
Though it used to be hard to invest in farmland because you needed a large sum of money upfront, online platforms like AcreTrader are making it easier for you to invest and benefit from the increasing land value and annual revenue from rent payments.
AcreTrader vets each piece of land to ensure it’s legitimacy and creates separate legal entities for each plot. Investors can then purchase shares of the entity as their investment. While their model shows promise, however, their services are currently only available to accredited investors.
Cryptocurrency is an increasingly popular alternative investment idea .
Millions of people today are flocking to crypto to add diversity to their portfolio as well as hedge against inflationary fiat currencies. Though crypto has gained a reputation for its extreme market volatility, it has seen a bit more stability of late.
Bitcoin has become such a desirable investment that even publicly traded companies are getting in on the action, like fintech powerhouse Square who just invested $50 million in Bitcoin. Or Paypal that recently announced you can buy and sell major cryptos on their platform.
When investing in cryptocurrency, you can choose to invest in different coins, including Bitcoin, Ethereum, and Litecoin. New crypto investors can use online exchanges like Coinbase to purchase crypto using fiat currency, and people with existing crypto investments can use crypto-to-crypto exchanges like Binance.
4. Peer-to-peer lending
Peer-to-peer lending works by connecting investors and borrowers around the world. Investors fund loans to borrowers in exchange for interest payments. Borrowers get alternatives to traditional lending platforms.
It’s an alternative investment class that has exploded in popularity in the second half of the 2010’s and left banks sweating.
You can use either USD or cryptocurrency on MyConstant to diversify your investment portfolio. All loans are collateralized, so you don’t have to worry about risky investments or high rates of default. Depending on which investment you choose, you can earn between 4–11% on a steady, uncorrelated asset class.
Interested? Sign up for a free account today and start doing more with your money.