Investing has come a long way.
You’re no longer limited to the options of putting your money in stocks, bonds, ETFs, or mutual funds.
For the savvy investor, there are many new alternative investments available, such as cryptocurrency. Or even reliable investments, like real estate, are considered alternative.
If you’re looking for a new way to invest and avoid brokers, learn more about the following five considerations of alternative investments.
1. What is an alternative investment?
Alternative investments are non-traditional investments, assets other than cash, bonds, or stocks. These investments can often be tangible items such as property, precious metals, art, or cryptocurrency.
Other types of alternative investments include investments in pooled funds such as the following:
- Venture capital
- Private equity
- Hedge funds
These types of investments are available to high-net-worth individuals, accredited investors, qualified purchasers, or brokers. They can have higher yields but require more significant capital than traditional investments. The assets also aren’t as easy to tap into anytime you want.
2. Why invest in alternative assets?
Investing in alternative assets diversifies the investor’s portfolio, an important aspect of investing, to ensure returns — no matter the market conditions.
Real estate has always been a worthwhile investment for the simple fact that people will always need roofs over their heads. Even if the market fluctuates, your alternative real estate investment is safe enough to weather times of inflation or other circumstances.
These types of investments are also historically known to see higher returns than traditional investments, such as the stock market.
Real estate capital funds, in particular, offer an opportunity for passive income, while still protecting the investor’s capital.
With private lending becoming increasingly popular, the flexibility it offers benefits both borrowers and investors. Private lending fills the gaps where traditional banks and credit unions fall short.
Some private funds are yielding as high as 9% returns annually from their loans.
Private lenders depend more on the merits of the deal than conventional loan qualifications. This creates a wider pool for successful projects to be approved for loans, meaning investors also get more opportunities to earn.
3. Which specific investments are available?
At private funding groups, such as Marquee Funding Group, there are targeted opportunities for investing related to real estate, such as:
- Non-owner occupied properties
- Owner-occupied properties
- Multi-family properties
- Commercial properties
- Construction loans
- Raw land
Private funding groups also offer more transparency in their operations than other financial institutions do, when it comes time for portfolio reports.
Other opportunities you may come across in the realm of alternative investments include:
- Private credit
- Commodities (such as gold, industrial metals)
- Equity crowdfunding
- Tax liens
- Private debt
- Fine art or antiques
- Alternative currency
- Startup funds
More and more investors are turning to alternative investments to obtain good yields and protect principal investment. New opportunities are created everyday, especially as concerns stemming from the COVID-19 pandemic arise.
As you parse through new alternatives though, remember which demands are likely to remain even in a volatile economy.
4. Are alternative investments risky?
Alternative investing is regulated less than conventional investing methods.
While the practice is subject to investigation by the Securities and Exchange Commission (SEC), the institutions offering investment opportunities don’t legally have to register with the SEC.
That means alternative investments aren’t necessarily regulated by the SEC or the Financial Services Regulatory Commission, such as other conventional means of investing like mutual funds or exchange-traded funds (ETFs).
It’s imperative that the investor does their own research about the opportunity. Funding groups often have income requirements for this reason, or they may only allow accredited investors to participate.
Investors will want to look for an established funding group. For example, Marquee Funding Group has over a decade of experience in the private lending field and has originated over 1,700 loans in that time, totalling more than $1 billion.
A good investment group will have the specs and experience to back up their claims.
5. How to start investing?
These days, all the resources you need can be found online. But be sure to research, as we mentioned, to ensure the legitimacy of any investment opportunities you find.
Online platforms are available, specifically, to find investment opportunities.
But again, you’ll want a funding group you can trust and who has the experience to nurture your investment.
Marquee Funding Group has delivered solid fixed income to their investors for over a decade. Qualified investors can participate in Marquee’s mortgage fund passively, with high-yield secured notes via expertly-underwritten mortgage products.
Contact Marquee to get started with your investments with a group of experienced individuals, delivering great returns and high security.