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Recent volatility in the stock market has many investors seeking alternative investment options. Diversifying your portfolio can help mitigate risk and potentially provide more stable returns over time.
Our partner, Public, is leaning into this concept with their new motto: All of your investing. All in one place. A diversified offering of investments appeals to investors who don’t want all of their eggs in the same basket.
If you’re looking to expand your portfolio beyond stocks, here are 5 options worth considering:
Exchange Traded Funds (ETFs)
An ETF is an investment fund bought and sold similar to stock transactions. It comprises a basket of assets, including stocks, bonds, commodities, and other securities, and typically tracks a particular index, sector, commodity, or other assets.
For example, a clean energy ETF invests in companies operating in the clean energy sector. This ETF would typically invest in assets involved in producing, distributing, or utilizing renewable energy sources such as wind, solar, hydro, geothermal, and biomass. This kind of investment is a convenient way to gain exposure to a specific market or asset class.
One of the key benefits of investing in ETFs is the ability to achieve diversification in a single trade. This may help mitigate risk and provide a more stable return over time.
Cryptocurrency is a digital asset that operates independently of a central bank and relies on cryptography to secure its transactions and regulate the creation of new units.
While cryptocurrency investing is generally considered riskier than traditional investments like stocks or bonds, its volatility has resulted in considerable returns for some early investors. This is due to the market's relatively new and unregulated nature and the high volatility of digital currencies. As with any investment, it’s essential to research and understand the risks before investing.
Treasuries are debt securities issued by the U.S. federal government to finance its operations and pay for various initiatives. They are considered one of the safest investments available, as the full faith and credit of the government back them. This means that the likelihood of default is low, making treasuries a reliable option for investors seeking low-risk and guaranteed returns.
Treasury securities are divided into three primary categories: Treasury Bills, Treasury Bonds, and Treasury Notes. Each category of treasuries has its own unique characteristics and can offer investors different levels of risk and return.
Moreover, treasury securities can play an essential role in a diversified portfolio by providing a stable source of income and serving as a hedge against market volatility.
Investing in fine art can offer unique opportunities to diversify your portfolio. Not only can fine art appreciate over time, but it can also serve as a hedge against inflation as the value of money decreases.
For fans of street artists like Banksy, investing in pieces of art could turn passion into profit with the right appreciation over time. Furthermore, interested investors can look up their favorite artists for a chance to own part of their work and earn a decent return in the process.
Platforms now allow members to buy shares of an artwork that could appreciate over time. Investors are offered these fractional shares as part of a long-term investment.
Collectibles and other alternative assets
Collectibles like coins, comics, vintage bags, or other historical items can offer investors an alternative to stocks. Similar to fine art investing, one option is to invest in parts of the asset, known as fractional shares. This allows investors to gain exposure to an asset that may be outside their budget while mitigating the risk of owning a single, expensive item.
From first-edition Pokemon cards to sneakers worn by the legendary Michael Jordan, alternative investing allows you to own a fractional share — and arguably, a piece of history.
The market for collectibles can be highly speculative, and it’s challenging to determine their value. As such, consult with a professional or seek out reputable dealers to help you make informed decisions. They may help you understand the market for a specific collectible and provide guidance on factors that can affect its value, such as condition, rarity, and historical significance.
A well-diversified portfolio can help you weather market ups and downs and achieve your long-term financial goals. If you’re interested in creating this kind of portfolio, Public is a great place to start. The ability to manage a diversified portfolio in one place has been a valuable offering to investors. To get started with Public, create your account by clicking here.
No matter your investment type, it is vital to understand the risks compared to the potential rewards before investing. Conducting thorough research and seeking professional advice could help you make informed decisions and avoid costly mistakes.