Statistically speaking, the Alternative Investments industry is expected to grow at a CAGR of 25% between the years 2022 and 2025. This sector has seen a significant amount of growth over the years, and one of the key components that drive the growth is the splurge in demand by the investors. Alternative Investments offer a lot of benefits, including diversification and higher returns. Numerous distinctions under Alternative Investments can fill up your portfolio; however, before shuffling through these options, let’s start with the basics.
Alternative Investment: What is it about?
The concept of alternative investment revolves around those investments that set themselves apart from traditional ones. For instance, traditional investments include stocks, cash, or bonds. Alternative investments, on the other hand, include assets like Real Estate. It has been estimated that alternative investments in Real estate saw a boost of 92% in India.
However, now more than ever, there is a need to broaden your horizon and opt for other means of alternative investments. Wondering what they are? We’ve got you covered. Scroll down to get an insight into investments beyond real estate.
Alternative Investments That You Need to Know
There is a wide range of alternative investments you can choose from. All you need is a keen eye and hunger for knowledge. Listed below are the alternative investments that go beyond the basic real estate and are a sure-shot way of a high returns investment.
The main aim of investing in a collectible is that its value appreciates with time. Many collectibles like coins and stamps grow significantly over time and hence, result in a high return on investment. These may also include objects that hold historical significance or premium artwork. Contrary to its benefits, it is highly necessary that you are well-versed in the object’s prominence before investing in it so as to eliminate any room for risk.
In today’s world, with rapid growth in startups and small businesses, many investors have started to see it as an attractive investment option. In the coming years, the number of startups is only going to increase, and with this increase, an investor’s chance of getting a higher return on investment also increases.
Another aspect that is an exquisite form of alternative investment is cryptocurrency. A cryptocurrency is a form of digital currency that is encrypted on a digital network. Over the years, investing in cryptocurrencies has proven to be a boon. Cryptocurrency has gained prominence from being a great portfolio diversifier to resulting in more return on investment. Furthermore, in recent times it has been made possible that you can exchange this digital currency for cash very easily.
The land that is set aside for agricultural processes like growing crops is termed farmland. Investing in such an asset can prove to be beneficial for the investor. As farmland is directly related to an increase in demand for food and other resources, thus, yielding a high return on investment. It is also a great way to diversify your portfolio and acts as a hedge against inflation. This investing can be done either by directly purchasing the land or investing in farmland REITs (Real Estate Investment Funds)
Many companies provide an opportunity to investors to invest money in heavy machinery or equipment. It allows the investor to have a part in tangible assets that produce income, like industrial machinery, planes, etc. It has been estimated that 8 out of 10 companies prefer to lease out their equipment, which in the long run benefits both the organization and the investor.
Investing in Films/Music assets or formally known as Media royalties, is considered a great way to diversify your portfolio and a great investment in general. Little by little, there is a growing interest in media royalties or the entertainment sector. Many people have started to look at it as an investment asset as it has showcased a high potential for a good return on investment. For instance, streaming platforms have a 93% rate of online streaming and earn revenue through advertisements.
As compared to other investments, hedge funds charge higher fees. But with high investment comes high return. The investments made under a hedge fund are considered illiquid, and the minimum time an investor is supposed to keep the money in the fund is one year.
Another underrated yet beneficial alternative investment is wines. Many rare wines hold a high value and become a crucial asset for investors. As per the statistics, over the course of the last 15 years, wine has generated a 13.6% return. However, it is advisable to be thoroughly familiar with the type of wines and which one will benefit you the most.
Precious metals like gold and silver offer safety from any market conditions. Investing in precious metals is one of the safest and most long-term investments and a great way to diversify your portfolio. It further offers decent returns on investment.
NFTs or Non-fungible tokens
These unique digital assets are saved on the blockchain and in no way can be hacked. This ultimate security has led to a rise in investments in NFTs. Furthermore, they depict a sense of transparency as the transactions are visible through the open ledger. The USP of an NFT that has made it a significant alternative investment is that it is immune to market conditions and a great way to mitigate risk.
The future of alternative investments is bound to be plausible. However, you need to be cautious about the type of investment you choose and how it will affect you. If you further wish to gain an insight into the Alternative investments industry, head over to the Bhive Alts website. This platform is a one-stop solution for everything investment related.