Investing in Alternative Assets is not as difficult as many people believe, but there are a lot of different options out there which can make the industry feel overwhelmed.
This guide on investing in alternative assets in 2023 will cover 3 investments that are effective, distinct from one another, and have their own pros & cons. The following list isn’t a recommendation, but just our professional opinion on areas that look particularly strong for 2023 investment.
If you already know that you want to add MCAs to your portfolio, you can do that here.
(Timeless) Pros and cons of alternative asset investing.
We have covered the pros in detail here, but, basically, alts offer:
- unparalleled diversification,
- higher chances of strong growth,
- and are some of the lowest-correlation assets you can invest in. When the stock market tanks (like now) alternative assets are not likely to follow suit.
On to the cons. Alts tend to have low liquidity – you can sell a fractionalized share of your Joran Air Walks but it will take weeks and weeks to get your cash.
The other major downside is the lack of regulation. You have to do your research and make sure that what you’re investing in is from a reputable company and that you’re not buying into a fake, investing in a scam, or making an investment without fully understanding the costs.
This is why it’s best to get advice from professionals or use platforms you know you can trust when making alternative investments.
The Top 3 Alternative Assets for 2023
Angel investing is a type of startup financing in which your money is swapped for stock in the company. It’s a one-time investment to get a business up and running or to develop a firm that is prepared to grow but lacks the funds to do so.
This is a great option if you have expertise in a particular area and you want hands-on investment experience. Angel investment is pretty time-consuming since you are expected to both funds and advise the firm.
Companies that dare to start up in a recession have to have rock-solid planning and strategy, and downturns mean there are bargains to be had with so many crashing company valuations.
This is a really fun type of alternative asset investment which is great if you are a superfan of, say, a particular painter or sports star.
Plenty of platforms exist which fractionalize collectibles like paintings or sneakers and allow you to buy shares in that asset, just like you would buy shares in a company.
As fractionalisation becomes more popular and better understood, more and more unique treasures are likely to come to market. This is great for people who don’t have a big lump sum to invest in an entire piece of art or a whole baseball card but still want to be involved in owning an important artifact.
Merchant Cash Advances
We are biased, obviously. But we also strongly believe that MCAs represent a massively underestimated area for growth and diversification. Especially for 2023.
MCAs are likely to be a huge growth area next year because market downturns bring in the highest-quality merchants with the best FICO scores and lowest default rates. More on that here. This makes for a stronger portfolio and higher yields for you.
Our investors are still above average growth across a well-diversified portfolio of MCAs and we are justifiably proud of that.
Interested in alts? You can get in touch with us here and we will be really happy to talk through all of your questions with you.