Investing basics
Table of contentsWhen thinking of investments, stocks and bonds typically come to mind. However, a whole universe of opportunities lies beyond these two asset classes.
For those in their 40s looking to grow their savings and plan for retirement, exploring unconventional investment options or what other people like to call alternative investments might be an option for unlocking new wealth opportunities.
Starting With The Basics: Understanding Alternative Investments
An alternative investment is a financial asset that does not fall into one of the conventional investment categories like stocks, bonds, or cash.
These investments include an array of asset classes like private equity, venture capital, hedge funds, art, antiques, commodities, and derivatives contracts.
Some unique methods of real estate investing are also often classified as alternative investments.
Key Characteristics:
- Diversification: They offer a way to diversify your portfolio, reducing overall risk.
- Higher return potential: They often have the potential for higher returns compared to traditional investments.
- Access to unique markets: They provide opportunities to invest in assets not available through traditional means.
Diversification: The First Line of Defense Against Market Volatility
Diversifying your portfolio with alternative investments can provide additional layers of security and growth potential.
Experts generally recommend allocating +10% of your invested cash towards these assets.
They often offer unique opportunities for returns, although they come with their own set of risks.
Here are the most popular alternative investment options to get you started…
The 4 Types of Alternative Investments:
Fractional Real Estate
Real estate has consistently outperformed the stock market over the past 30 years.
With platforms like Stake, you can invest digitally in prime residential properties in Dubai through fractional ownership.
This means you don’t need to buy an entire property. Instead, you can invest small amounts, earn shares and still benefit from both rental income and property appreciation.
It's a way to join the Dubai real estate scene without a huge upfront cost, making it a smart, affordable choice for everyone looking to diversify their investments.
Comic Books Collections
Comic books as an investment…. Sounds wild, right? But yeah, comic books can be a unique and exciting way to invest, especially if you know the market.
Rare comics can fetch high prices at auctions. For example, a 1938 comic featuring Superman's first appearance sold for over $2.1 million in 2011.
One collector bought pages by Todd McFarlane and Rob Liefeld for around $60 each in the 1980s, later selling them for a solid return.
In recent years, the comic book industry has seen a resurgence, with total sales hitting $1.28 billion in 2020, up from $870 million in 2016.
If you’re wondering where to get rare comics at a low price, try visiting conventions or online marketplaces.
Gold Coins and Rare Collectibles
Investing in gold coins and rare collectibles presents a tangible and promising option for those looking to diversify their portfolios.
Gold, known for its stability, has experienced a remarkable 600% growth over the past 20 years, solidifying its reputation as a dependable investment.
There are companies dedicated to selling gold coins and rare collectibles, providing a personalized numismatic experience with high-quality and valuable items.
They maintain extensive inventories that include classic, modern, ancient, and shipwreck coins, catering to various collector needs.
For example, a 1942 Lincoln Wheat Penny can range in value from a few cents to thousands of dollars, depending on its condition and rarity.
These companies ensure that collectors and investors receive fair and accurate valuations for their coins, preventing them from selling valuable items too cheaply.
However, it is important to approach coin investing with a long-term perspective, as the true value of such investments often materializes over extended periods.
Parking Spots
If you live in a crowded city with loads of traffic, you'll get this—parking spots can actually be a goldmine investment.
These spots can often be purchased for much less than a residential property and rented out for hundreds of dollars monthly.
This can be a less labor-intensive investment compared to being a landlord.
The potential for high returns is evident in the revenue generated by the parking industry.
In the United States, the revenue from parking lots and garages has been steadily increasing, and is projected to reach approximately $11.3 billion by 2024, up from $7.5 billion in 2012【Statista Research Department, 2023】.
A Quick Recap: Comparing Alternative Investments
Curious about comparing these alternative investments to find the best choice for you? Click here to read our article on "Real Estate, Gold, Savings Account – What’s The Best Option?"
Ending note:
Alternative investments can be an exciting and profitable addition to your portfolio, offering unique opportunities for diversification and higher returns.
Whether you’re investing in fractional real estate through Stake, purchasing rare coins, or exploring the world of comic books and parking spots, these alternative investments can provide exciting opportunities to enhance your financial future.
If you’re curious about these investment opportunities, it’s worth doing your homework to see how they might complement your existing portfolio and retirement plans.
