Nearly all investors diversify with stocks and bonds. However, exploring alternative investments can yield attractive returns and enhance your portfolio’s diversity. Here are five intriguing and innovative alternative investment opportunities that might not be on your radar yet.
Read: Here are 7 Smart Ways to Invest 1,000 dollars
5 Alternative Investment Options for You
Real Estate Peer-to-Peer Lending
Peer-to-peer lending is familiar to most investors. However, many don’t know that it now extends beyond personal loans. Through specialized platforms, investors can fund loans for various business ventures, including real estate. In real estate peer-to-peer lending, investors lend money to real estate professionals. These professionals use the funds to rehab and flip properties. This type of lending is risky due to its speculative nature but can yield high returns. Returns from these loans often exceed 10 percent annually. Groundfloor and Patch of Land are notable platforms specializing in real estate peer-to-peer loans.
Buying Investment-Grade Diamonds
Many investors choose to hold physical gold and silver as hedges against inflation, but metals aren’t the only luxury goods that are purchased as investments. Diamonds, much like gold, can be purchased and held as safe havens for cash against inflation. Diamonds don’t yield consistent returns, but they are usually fairly suitable for riding out periods of instability in more traditional markets. Be aware, however, that diamonds are much more suitable for experienced commodity investors. Their high price, combined with low market liquidity, makes them too difficult for most investors who are just getting started.
Investing in Shipping Containers
Oddly enough, investors with the means to buy and lease out commercial shipping containers can earn very high returns on doing so. Shipping containers are necessary for the flow of goods around the world, but a general shortage of supply has led transportation companies to lease additional containers from private owners. This situation has led to the rise of shipping container investing, in which investors purchase containers and then lease them out, generally through a broker who specializes in this field, to major global shipping companies. The returns on this kind of investment are quite generous, ranging from 10 percent annualized returns for long-term leases to as much as 20 percent for shorter-term leases
Website Investment
In many ways, websites are the real estate of the digital era. It is therefore unsurprising that methods very similar to traditional real estate investment have been applied with considerable success to websites. Buying a website or domain that is small and doesn’t have a great deal of content on it at a low price is analogous to purchasing a home that needs work. You can then invest either time, money or both into the website to put more content on it, improve its design and increase the amount of traffic it receives.
Making money with website investing can be done in either of two ways. The first method is to keep the site yourself and monetize it with advertising and affiliate marketing offers. Good websites can provide hundreds or even thousands of dollars in cash flow every month in a more or less passive manner. Alternatively, you can increase the value of a website by building it up and then selling it. The return on investment from flipping websites varies widely based on how much money you put into a site and how you improve it. However, many website flippers can see returns of 20 percent or more on each site they improve and sell.
Investing in Forested Land
Land investment is familiar to many experienced investors. However, you may not know that forested land is a viable long-term asset. Forestry is a booming industry as wood resources become scarcer each year. This trend has led investors to purchase forested lands or buy cleared lands to reforest them. The commercial value of trees means forested land can appreciate greatly, especially with reforestation. Trees typically mature in 30-50 years, making them commercially viable. If you are an investor with a long-term outlook, this might suit you. You can also opt to sell the land early, allowing another investor to wait for the trees to mature. Additionally, owning forested land provides the benefit of a private recreational space.
While these alternative investments may not suit everyone, they highlight the vast array of options available in today’s investment ecosystem. By venturing beyond traditional stocks and bonds, you can discover numerous ways to diversify your portfolio with alternative investment opportunities.