Should You Consider Alternative Investments?

Most people are familiar with the standard investment options, including stocks, bonds, and cash. Some people might even have advanced strategies for their investments in those vehicles, but there are alternative investments that might be worth looking into.

Alternative investments include real estate, hedge funds, venture capital, and collectible assets (including art, wine, or rare coins).

Not all of these investment vehicles are open to all investors (some are limited to institutional or accredited investors), however some of them are. And if you’d like to diversify your investments further, it’s worth exploring these alternative options.

Diversification and New Opportunities

Since some of these investments are not correlated with stocks, it’s possible that some will rise during a recession, or possibly not drop as much. It simply allows you to put your eggs in different baskets so that your risk is not that concentrated.

In addition, since alternative investments are considered inherently more risky, that risk can oftentimes comes with more volatile returns. This could mean that the risk is worth it because you can be rewarded with higher returns.

Physical Assets

One of the more interesting alternative assets are tangible assets such as artwork, fine wine, precious metals, or collectibles.

Of these assets, fine art tends to be the most highly valued. While most people don’t have the money or expertise to buy an expensive piece of art, Masterworks allows investors to invest in a painting instead of buying the whole thing and having to deal with all that entails.

In some ways, it’s similar to buying stocks in that you own a small portion of the company (or in this way, a piece of art) and then you enjoy the increase in value when you sell.

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