More and more people are starting to invest in stocks and bonds as a way to either build up enough money for retirement or to generate income. Stocks have the potential to produce capital appreciation over the course of several years, while bonds provide investors with an income on a semiannual basis. Those who want higher returns and are willing to take a bigger risk invest in stocks, and those who want to stay on the safer side of investing choose bonds— although they provide lower returns.
Investing in both stocks and bonds is a good way to get started in investing and diversifying your investment portfolio, but there are several other things that you can also invest in, further diversifying your portfolio. Here are four investment alternatives to stocks and bonds.
#1: Fine Art
Fine art is an asset that many people tend to forget about when it comes to items of great value. Paintings are the most common type of fine art investment, but you can invest in other forms of art as well. When investing in fine art, it’s important to understand the field of fine art investing, as fine art isn’t as liquid as other types of investments. If you’re into fine art and a lover of all things beautiful and aesthetically pleasing, then fine art would be a good investment for you. However, if you’re looking to generate immediate income, then this isn’t something you should invest in— or it shouldn’t be the only thing to invest in.
#2: Small Businesses
One of the best ways to support a small business is to shop locally, but an even better way to support the small business in your area is to invest in them. By investing in a small business, you can increase your capital by helping a small business flourish. This also helps stimulate your local economy because small businesses provide jobs for a significant number of workers in the United States. Some of the best types of small businesses to invest in are copywriting businesses, cleaning services, storage facilities, fitness centers, and event planning services. Investing in the right type of business can build long-term wealth.
#3: Real Estate
Although investing in real estate comes with a lot of risk, it’s one of the most liquid investments that generates high yields, and it’s also a great way to diversify your investment portfolio. Even if you only invest in real estate, there are so many different types of properties that you can invest in that will diversify your portfolio alone. The key to being successful is to understand real estate investment strategies in order to see a return on your investment. Real estate investing allows you to earn a steady stream of income by investing in residential or commercial properties and earning rent from your tenants, or by flipping a property or developing a piece of land for a profit.
Cryptocurrency is also known as “digital currency” that doesn’t need a central monetary authority, but can still be used to purchase goods and services. It’s safe to say that Bitcoin is the most popular cryptocurrency on the market today, as many Millennials have already begun to invest in it. Although cryptocurrencies won’t give you a steady flow of income like real estate would, it’s likely that this digital currency will be the future of monetary exchanges. This reason alone is why many people choose to invest in it. Still, investing in cryptocurrency carries risks just like all other investments, so it’s best to do all of your research before investing.
These are just a few examples of things you can invest in besides stocks and bonds. When it comes to investing, you should definitely invest where your interests lie, as you’ll be more passionate and willing to learn. Always do your research before investing to limit the risk of losing money.