Many people decide to avoid investing in stocks and shares due to the risks attached. Thankfully, there are many alternatives available if you do want to invest your money without getting involved with the stock market. Let’s look at six of the best alternatives to stocks and shares right now.
With private equity, Felix Beck explains that you can invest in a company that’s not issuing public stock. You can start by investing your capital into a business before you receive a return after the company has reached a specific goal or stage. This stage might be when the company is merged with another one or when some stock is made public. Over recent years, private equity investment has been frequently poured into start-up tech businesses, and alternative energy has also become popular amongst investors. As a private equity investor, you may have a substantial say in how the company is run. You may become part of a pool of investors. It’s worth noting that this form of investment can be somewhat costly.
Venture capital is a type of private equity. However, with venture capital, investment is made in start-ups that are at an embryonic stage in their lives. Firms that specialise in venture capital provide capital so businesses can get off the ground. They expect to make their cash back and more when the company is purchased or when it decides to issue stock. However, it could take around a decade for you to get your money back. This means venture capital should be regarded as a long-term investment opportunity, and you may not get it back at all. To mitigate this risk, venture capital managers spread money around a diverse range of businesses. You will normally be expected to invest a substantial sum of money to take advantage of venture capital opportunities.
Felix Beck on hedge funds
Hedge funds take money from a range of investors and put it into several investments. The purpose of this is to optimise the chances of a big return on investment. One reason why hedge funds have become so popular is that they don’t face as much regulation as other funds. Hedge funds have also risen at the same time as stock markets have fallen or only made small gains. Nonetheless, hedge funds are not risk-free, which is why it’s so important to take a close look at each fund that you’re interested in before you proceed.
Managed futures are similar to hedge funds, though they are more strongly regulated. Managed futures funds allow you to benefit from opportunities in the currency, commodities, and interest rate markets. Managed future investment requires you to make predictions on how investments and equities will fare. A future is an agreement to purchase a commodity or currency at a specific price on a specific date. If the price changes compared to the price you originally agreed, you can make money, but may also lose it. One of the key benefits of managed futures funds is that you don’t need to make as big an investment as you would with a hedge fund. However, there is still an element of risk involved as your predictions could be highly inaccurate.
Real estate investment
With real estate investment, groups of investors fund the purchase of large property developments. There are many different ways people can invest in property, says Felix Beck, without living in it. They can buy property to rent out to tenants, buy shares in real estate trusts and join real estate investment groups. If you are considering buying a property to rent, there are several things that you need to bear in mind. Maintaining a property can be expensive and eat into your profits, and you’ll also have several taxes to pay. You may also spend a great deal of time removing tenants if they don’t turn out to be a good match for your property.
When you join a real estate investment group, you can remove much of the risk and work from investing in property. You’ll need to contribute capital to a company that buys a property. The company will then go on to manage the property and take a percentage of the rent. Real estate investment groups invest in large numbers of properties and can receive tax breaks after paying a certain amount of income to shareholders.
Over the past decade, investors all over the world have been able to grow their returns by investing in cryptocurrency. The first form of cryptocurrency was Bitcoin, which is just one of many new currencies that have reduced the cost of making cross-border transactions happen. Cryptocurrency has also delivered swift processing times and greatly reduced our reliance on central banks. Many investors love cryptocurrencies due to the way they give them more control over their capital and data. It’s said that there are now more than 5,000 cryptocurrencies to invest in.
Another big reason why so many investors are attracted to cryptocurrency is that they offer high liquidity. This means it’s relatively straightforward to buy and sell cryptocurrency. Studies constantly support the view that cryptocurrency is delivering much higher returns than many other assets, even stocks. As cryptocurrencies are so volatile, just one trade can provide an outstanding return. Of course, this also means there is considerable risk involved. The crypto market is also open around the clock, so you’re not restricted by opening times. You can buy and sell at any time. Cryptocurrency may also help you diversify your portfolio and therefore reduce financial risk. Some of the most talked-about cryptocurrencies of recent years include Ethereum, Dogecoin and Cardano.
There are many options to take advantage of if you do want to see your money grow without relying on stocks and shares concludes Felix Beck. Whether you invest in cryptocurrency, real estate, managed futures, venture capital, hedge funds or private equity, there’s always a great chance you’ll be able to meet your financial aims.