Alternative investment opportunities have soared in the last few years.
Investors, especially accredited investors have had an extensive supply of new investments to pick from.
With the concern of inflation and stock volatility, investors have migrated to alternative investments, such as Supervest. In the last year, Supervest has grown at a substantial rate, because investors see the benefit of investing in a MCA (merchant cash advance) investment platform. The newness of our platform and other alternative investments are a sense of excitement to some and a pattern of passive income to others. Our expertise in MCA’s and building an alternative investment platform, translates into our passion to educate accredited investors and other investors about the best alternative investments and our platform.
Explaining the ongoing enthusiasm with alternative investments can be tough to some individuals who are more protective with their investments. Any investment that is new and not common does have certain risks that investors should consider. The benefits of newer alternative investment ideas do give investors an expansion to their portfolio. When looking at alternative investment opportunities it is best that investors have discipline and education on what the best alternative investment funds are. Below we dive more into where alternative investments in 2021 stand.
What Are Alternative Investments?
An alternative investment is a financial asset that does not include stocks, bonds, or cash. Alternative investments can be private equity, venture capital, private debt or a hedge fund. They contain a wide range of assets from real estate, art, commodities, small businesses, and contracts.
The best alternative investments have a higher yield and have a due diligence check. Many investors are looking for passive income and alternative investments are a great way to propel that aspiration. The turnover rate in alternative investments is lower because investors usually invest a high minimum at the initial investment. This means investors in alternative investments are very committed to the investment they make.
Alternative Investing Fast facts:
- Transaction costs for alternative investments are lower than traditional investments.
- From 2018 to 2023 alternative investments are expected to grow by 59%.
- Alternative investments are growing in pensions and endowment funds because of the long-term benefits.
- Alternative investments are expected to have an exponential growth to $14 trillion by 2023.
How are alternative investments different than regular investments?
Alternative investments are different from regular investments because of their liquidity, non-regulated status and longer commitment time frames. The benefits of alternative investments include diversification, high absolute returns, reliable income stream, and low correlation to public markets.
More positives of alternative investments include: active ownership, limited to accredited investors, potential tax-advantage and possible high-rewards for investors. They also have a barrier to inflation, for any investors worried about inflation. For investors worried about where their investments go and how they impact the world. Investing in other businesses and start-ups are a way to have more of an impact for investors looking for that type of investment. Many of those start-ups are alternative investments that usually have an impact statement for investors, to figure out where and how the business is looking to grow. Investors should make sure they research and educate themselves about any new investment they plan on investing in, even if it aligns with a cause you care about.
Since investing in alternative investments requires due diligence it is advised that only accredited investors invest in some of these investments. Accredited investors incompass: Anyone who earns over $200,000, has a net worth of $1 million or more, holds a Series 7 ,65 or 82 license, a trust over $5 million, an entity with over $5 million in investments and an entity where the equity owners are accredited investors. Some alternative investment platforms may make you certify that you are an accredited investor before investing. Non-accredited investors can also access alternative investments. Alternative exchanges and mutual funds are the current ways non-accredited investors can access these investments.
Do alternative investments have different risks from normal investments?
The risk that alternative investments have differs from regular investments. These risks include default risk (buyer can not repay their loan, principal risk (lender will not get back some or all of investment), valuing troubles (commodities go up and down depending on the economy) and being unregulated (anything not publicly traded is not regulated by the SEC). Depending on the alternative investment, some may have one or all of these risks. It is best to perform a due diligence assessment for yourself if the alternative investment platform does not perform it. In addition, some rare alternative investments are also harder to sell if they are one of a kind like a collectible.
The best alternative investment funds, especially if they are platforms, should have a FAQ page that helps new investors to their investment, understand the benefits and risks. Alternative investments are in the middle of a rapid growth period. It has been a few years since many alternative investment opportunities have blossomed, so investors should be able to get a great deal of information from platforms, articles and advisors on alternative investment risk factors.
Different alternative investment classes
In recent years, there have been numerous alternative investments gaining popularity among accredited and non-accredited investors. These asset classes can be rare or a new popular asset. Below are some of the best alternative investment funds for investors to consider.
List of The Best Alternative Investments
- Crowdfunded Alternative Investments(supervest)
- Private equity (private investments)
- Distressed securities (bankrupt companies)
- Cryptocurrency (online unregulated currency)
- Venture capital (start-ups)
- Commodities(commercial items)
- Real Estate (commercial or residential properties)
- Foreign Currency (currency not used in investors’ country)
- Insurance Products (insurance or annuities)
- Derivatives (financial contracts)
- Collectibles(rare items)
- Emerging Markets (companies located in emerging countries)
These investment classes are all alternative investments, but have different risk factors, liquidity and yields. It is best to do research on a specific investment before investing. Many investors may already be investing in an alternative investment if they own property, because real estate is an alternative investment. If an investor is educated on the risks of real estate investments, then they can carry that knowledge into investing into another alternative investment.
Average return on alternative investments
The average return on alternative investments, depends on how much you initially invest. Since alternatives usually have a higher yield rate, you can see your returns anywhere from 10-40% depending on the investment. The return rate also highly depends on the individual investor. The particular alternative investment that is chosen by the investor, and how much time the investor spends actively investing are all factors in the return rate. Some alternative investments and their platform have formulas or examples of their return rates, which can be helpful when looking for which alternative investments to invest in.
Timeline to see returns on alternative investment
Return timelines for alternative investments can vary, from months to years. Alternative investments such as Supervest have a 3-9 month yield rate. Investors who are committed for the long run have a greater chance for higher yields and growth potential, like traditional investments. Alternative investments that are harder to sell, may have an unpredictable timeline for a return because of the circulation of that investment.
When choosing an investment, the timeline of a return may be known after research, but it also depends on what an individual investor is looking for in their investment. Knowing what your individual timeline and expectations are, is a pivotal element because it can help in deciding what the best alternative investment opportunity will be for you. Every investor is different, some want passive income, others want to have a diverse portfolio for many reasons. The best alternative investments for investors depends on what they want their return and yields to be. Making your own timeline and accessing that timeline against a particular alternative investment will help in determining the timeline of a return for your alternative investment opportunity.
Are non-stock investments still lucrative?
Non-stock investments will continue to be lucrative since many of these investments are only open to accredited investors. Many of those investors are looking for passive income where they just have to deposit money and watch their returns grow. Alternative investments are also the fastest-growing investment currently available.
The growth of alternative investments now and in the future is a major part of why they have become more lucrative year after year. If an investor starts to invest in an alternative investment opportunity now, they will be contributing and helping the growth of alternative investments for the future. Any investment has risks, but the high yield of many alternative investments makes them the ideal investment if an inverter is looking for something more lucrative.
Do you need to be rich to make alternative investments?
The average investor can get involved in alternative investments. Since alternative investments are broad, individuals who are a part of a higher asset class can invest in more alternative investments. Investments, such as cryptocurrencies can be bought by anyone. Research and contemplate the specific investment you want to invest in. Most new alternative investments have detailed explanations on a company’s website for more clarification. This should be a good barometer to find out if you are in a good financial position to invest in a particular alternative investment.
Some of the best alternative investments started off offering assets to only accredited investors, but now a significant number have opened to non-accredited investors on a smaller scale or through different types of investments.
Make Alternative Investments Part Of Your Portfolio With Supervest
If you are an accredited investor looking to diversify your portfolio, Supervest may be the right platform for you. We offer a self-directed fund as well as a 12% note for investors looking for upside in a new emerging investment asset. Sign up today or schedule a call with us to get more information.