When you are preparing your investment portfolio, there is one key consideration. Can your portfolio weather the unexpected? If your money is tied up in one investment, what can you do to protect yourself from market downturns or unexpected financial or social events?
One way to diversify your portfolio is to include alternative assets. Knowing that you have at least one investment option outside of the standard futures will help you face any financial surprises that may appear in your future.
Read on to learn more about these options and how they can help you build a more balanced portfolio.
Alternative Assets to Diversify
1. Cryptocurrencies
With a volatile cryptocurrency market, there is an element of risk when investing in these digital assets, as the potential to lose money is also high. However, for those interested in diversifying their portfolio, digital currencies such as Bitcoin, Ethereum, and Litecoin can be a great way to mitigate risk with a relatively small investment.
Cryptocurrencies can also act as a hedge for other investments, particularly in turbulent markets, due to their decentralized nature and the lack of government influence. When used as part of an overall portfolio strategy, cryptocurrencies can greatly increase returns and reduce overall risk.
2. Real Estate
Real estate investment offers several potential benefits, such as:
- long-term appreciation
- steady income
- diversification
Real estate has lower volatility than other assets, and investors can benefit from low correlation with the stock market. This provides a hedge against economic downturns.
Real estate is also a tangible asset that requires active management, which can offer significant returns when done correctly. Adding real estate to a portfolio can take some of the risks away from other investments while providing stability and capital appreciation.
3. Art and Other Collectibles
Art can come from many different sources and styles, from the works of contemporary, street, outsider, or modern artists, to classical works and beyond. Collectibles come in many forms, such as:
- antiques
- coins
- stamps
- sports memorabilia
- digital collectibles
Many of these forms have existed for centuries and can continue to provide sustained value and appreciation, even throughout market cycles.
4. Precious Metals
Investing in these metals provides the opportunity to capitalize on their changing values. Many investors consider gold the most attractive precious metal for long-term investments. Gold has the added security of holding its value, regardless of inflation or other economic shifts.
Silver and platinum are also reliable investments, and both can provide substantial returns over time. Other valuable metals, such as palladium, rhodium, and osmium, can provide additional stability and potentially even greater gains.
5. Luxury Watches
Luxury watches are an asset class slowly appreciating and may outperform stocks in the long run. They’re an asset class that’s hard to get into for most investors, but for those looking for diversification, it’s a great way to go. One of the advantages of luxury watches is that they are much less easily affected by market changes, making them a good option for long-term investors.
Alternative Assets That You Can Invest
Alternative assets can provide your portfolio with the diversification and potential for growth you are looking for. Don’t miss out on the opportunity that alternative assets can provide.
Consult with a financial advisor today to learn how to diversify your portfolio with alternative asset investments!
Your future is in your hands. If you want more valuable ideas on creating an investment plan and achieving stability in your finances, check out the other articles on the blog.
