Alternative investments can be a lucrative interest but there is still plenty of risk involved. Having said that, alternative investments aren’t just for very wealthy people and more people than ever are looking at investing their money rather than letting it sit in a bank account.
For some time stock markets have fluctuated and they can be a real gamble. Of course there are still risks with alternative investments but people are a lot more willing to put their money into something physical that they have more control over. If you have money to invest then chances are you are going to have a lot of questions about alternative investments and we have done our best to summarise them below.
Why alternative investments are a good idea?
As we mentioned above, stock markets fluctuate significantly and it makes a lot more financial sense to invest in a property portfolio, where you will generally always make a reasonable return on your investment over a loss. There is less risk involved in spreading out your investments in property than putting it all on stocks.
Are there still risks?
There will always be some form of risk involved in investing money, but the key is to balance your investments with varying levels of risk to ensure you generate money but don’t put all your eggs in one basket. A solid investment plan should always have alternative investments in place and the more diverse your investments are, the less risky the portfolio will be.
What are some of the most popular alternative investments?
Investing in property is perhaps the most commonly known alternative investment, but alternative investments can refer to anything outside of the stock and shares market. A lot of people invest their money in a loan service and this is believed to be a very beneficial form of generating profit as well as helping the people who need loans. Then of course you have the alternative investments that become people’s hobbies, such as stamp or coins collecting as well as rare and fine wine investment.
Is peer-to-peer lending safe?
As we mentioned above, lending money is seen as a win-win for both the person who requires the money and the person who loans it as they are both getting what they want. The person who needs the money gets a personal loan at a fixed rate, whilst the loaner gets a higher rate of return than they would if the money was just sitting in a bank account.
Once again there are risks involved, such as the fact that you are relying on strangers to pay the loan back and just as with investing in property, it’s probably not a good idea to put all your money into loans in case something bad were to happen. However there are companies that facilitate these loans for you and make sure that your money is in safer hands than if you were to try and do this service by yourself.