Gold, sheep, precious stones, and great warriors used to be traditional things people invested in 2000 years ago. Today, traditional investments have slightly changed.
Since its launch in 1792, the New York Stock Exchange (NYSE) and its successors became the primary way to invest money and earn passive income. Investing in the stock market quickly became even more popular with the advancement of technology in recent years, opening new opportunities for investors.
But the last few years weren’t as good for investors as they hoped, and, let’s be honest, the coming days don’t look as bright for stocks either.
Whether you are an accredited investor, or you’re simply looking for investment options, it’s about time to consider alternatives to the stock market, and mitigate all possible risks by making a smart move and diversifying your portfolio.
7 Best Investment Alternatives to the Stock Market
If you’re looking for alternative assets, go to alternative markets. In the world of finance, alternative assets relate to everything that is not stocks, bonds, or ETFs.
Let’s have a look at some of them and find out if these stock alternatives will help you reach and sustain a high net worth.
What other stock alternative could we talk about first? For many years, gold was used as the primary way to pay for…well, everything.
Historians have found records of gold being used for payment as early as 500B.C. Gold is what brought freedom seekers to the western coast of America. Gold is what was used to support the U.S. Dollar for some time.
As you can see, this soft shiny metal has a proven track record of being valuable which not many stock market alternatives can boast. For quite some time, gold has been a traditional alternative to the stock market, a way to hedge against the stocks’ volatility and even inflation.
Plus, there are multiple ways to invest in gold, starting with gold bards, coins, and even jewelry, and ending with gold ETFs or futures.
Another great stock market alternative is real estate. Whether you wanna do house flipping and earn profits from price appreciation, or invest in a condo or an office space and earn from rent, real estate investment is a top alternative investment with high potential rewards and low correlation with stocks.
When investing in real estate, most people think of getting a mortgage due to very high entry costs. But today there is an alternative way to invest in real estate, something that doesn’t start your investing journey with a huge debt to repay:
Fractional real estate investing.
Like other fractional investment alternatives to stocks, buying fractional shares of real estate will make you a partial owner of a complex, and you will be subject to partial rewards and monthly rent payments.
No need to look for tens of thousands of dollars to buy your first property. Start with as little as $500 and grow your portfolio with multiple properties in various locations.
Definitely one of the top assets to buy in your 20s.
The pros and cons of investing in crypto deserve a separate blog post, so I won’t be going through them in much detail here. Crypto is considered to be the future of finances, and even today we can see new uses of blockchain emerging almost on a monthly basis.
Just like the stock market, though, crypto took a tumble these past few months and is seemingly only now getting into recovery mode.
If you consider crypto as your investment alternative to the stock market, make sure to do good research, and invest in projects that you feel are legit, and have the potential to grow in the future. This is a type of investing with high risks and high rewards, so use your money wisely.
Interesting fact: when inflation hits anywhere higher than 3%, art sales increase by as much as 32%. When things go south in traditional finances, investors go to the best alternative investment. In most cases, that alternative is art.
Art has outperformed major stock indexes, gold, and even some other alternative investments to the stock market during the past 30 years. No wonder why rich people invest in art, even despite huge taxes, storage costs, and very low liquidity.
With the advancement of blockchain technology and new financial regulations, investors can now invest in fractional shares of artworks and art collections and start making money as art investors with minimum entry budgets.
In some cases, this even creates more liquidity, opening even more opportunities for testing your alternative investing ideas.
If this opportunity is interesting to you, check out our art investing guide.
Wine & Liquor
As you might already know from our latest guide to investing in wine, this option is another great alternative even to other investment alternatives to the stock market. If you’re good and have the budget, you can even combine your passion for drinking and making money by always buying twice as much of that drink.
But wine is not the only alcoholic beverage that you can invest in.
Whiskey barrels, aged single cask whiskey, and even brandy can also become great alternative investments to stocks. But before you decide to spend $10-50K on buying a cask of whiskey, do your research and test out your passion for this kind of investment on fractional marketplaces–sometimes, investing in an already bottled beverage can be more rewarding than buying a full barrel–especially if you’re not looking to put that money aside for 15+ years.
The hype that non-fungible tokens created has settled down a bit, and this created new opportunities for truly worthy projects to come through. So if you’re able to tell the difference between a ‘pricey jpeg’ and a worthy NFT, these specific investments are a great addition to your diverse portfolio.
Most retail investors can have a hard time starting their journey into the NFT world, but if you’re using a centralized platform for crypto trading, or an NFT marketplace, you’ll find your way through, and even be able to put your new addition to the portfolio as an avatar on a Twitter Blue account.
While even a good watch won’t tell you when it’s time to buy or sell your portfolio, luxury watches are great alternative investments to stocks. Especially when the watches we talk about are Rolex.
Watches are specific investments. They cost a lot, and they cost more if unworn. Yet, the temptation to go out for a dinner wearing the ‘Hulk’ Submariner or a ‘Batman’ GMT-Master II is so high that sometimes you wish you bought a full collection and could wear at least some of your investments.
Why are watches a good alternative to stocks? Because some of them don’t decrease in value since production. Other watches experience appreciation in pricing after being discontinued.
In any case, the scarcity, secondary market hype, and high emotional value make watches one of the best alternatives to investing in the stock market.
When the goal is to make money, there is always an alternative way to do this. Stocks were made popular and available to retail investors when Robinhood and the such launched. And it was great–people can now invest in their favorite companies in hopes of making a side profit or even caring for a careless retirement.
As innovation and the desire to make more money drive the world onward, new opportunities for retail investors keep emerging. Fractional investment platforms such as Investables take old and proven ways that rich people used to make money and make it available to everyone.
What can be better for a starting investor on a budget than investing $10,000 right here and now in a diverse collection of watches, art, or even classic cars, and trading with like-minded people for profit?
Only the moment when they become full owners of the collections are able to get it delivered to their doorstep.
Explore your investing opportunities with Investables, and stay up to date with all our upcoming collections!
Frequently Asked Questions
How can I earn passive income instead of investing in stocks?
There are plenty of alternative assets to choose from: real estate, art, watches, NFTs, or even commodities. Depending on your budget and investment plans, you can choose between those options, or diversify your portfolio with a few of them.
Are there other investments that are safer than stocks?
The short answer is yes. There are options that are less volatile than stocks. Art and watches, for example. Even gold. During the hard times in the traditional financial markets, people often turn to alternative investments.
Which alternative to the stock market can you recommend investing in?
Investing in exclusive collectibles is a great alternative to traditional stock trading. Collectibles are a great way to hedge against the stock market and even inflation. They also have a proven track record of price appreciation over time, that surpasses major stocks and indexes.