With stock and bond markets being shaken up by volatility, inflation, geopolitical tensions and geoeconomic issues, even experienced investors must reconsider their portfolio strategies. Alternative investments offer more diversified risk mitigation with potential higher returns.
Traditional investing has long been reserved for institutions and ultra-wealthy investors; however, recent changes to regulations are opening the doors for mainstream investors as well. Let’s examine some of the top trends in alternative investments for 2023.
Real estate investment is one of the most sought-after forms of long-term growth investment, enabling individuals to purchase homes, apartment buildings or commercial properties like warehouses or strip malls with an eye towards appreciation in value over time.
Real estate enthusiasts who lack the financial means to purchase properties may still participate in the industry by investing in private mortgages through online marketplaces like Paperstac. Here, investors act as banks and receive interest payments in return for a stake in each property owned.
Real estate has historically provided investors with income, diversification and inflation protection in their portfolios. Both publically traded REIT stocks and unlisted real-estate funds typically delivered returns comparable to equity indices while slightly outpacing core government bond yields.
Cryptocurrency has quickly gained in popularity thanks to its ability to be transferred quickly and anonymously without the need for intermediary banks or services. Furthermore, the value of various coins fluctuates wildly – making them attractive investments for speculators traders.
Alternative investments beyond stocks and bonds may also be included in portfolios, including private equity, private debt and infrastructure investments. While less liquid than public markets, these investments typically provide higher yields with additional diversification benefits.
Investment opportunities previously restricted to accredited investors have now become accessible to more people under new laws, thanks to Yieldstreet offering mainstream investors access with buy-ins as low as $10,000. Learn more about investing in innovative opportunities today by exploring them further on Yieldstreet!
Oil & Gas
Investment in alternative markets can provide a valuable diversification strategy for your portfolio. These investments often feature private assets, natural resources, infrastructure or startups with long-term growth prospects and provide high levels of investor return.
The oil and gas industry encompasses businesses involved in the discovery, extraction, transport, refining, distribution and sale of crude oil and natural gas. It typically divides into three operational segments: upstream, midstream and downstream.
Industry has traditionally provided fuels that power our world, but climate change will require them to do much more. Invest in carbon capture and storage technology (CCUS) or switch their business model toward low-carbon or renewable services that they provide.
Renewable energy can help reduce emissions and lower our dependence on fossil fuels, while wind and solar have seen dramatic cost drops over the past decade, becoming increasingly competitive against traditional fossil fuels in many markets.
Investment tax credits make renewable investments even more appealing by reducing upfront costs and shortening payback periods. Furthermore, renewables often boast lower-volatility cash yields with limited correlation to public markets – providing excellent diversification benefits for investors’ portfolios.
Not only are there opportunities in renewable generation assets directly, but there are also public market investments related to broader energy transition efforts like grid resiliency and new infrastructure projects. Furthermore, equity crowdfunding has emerged as an asset class suitable for individuals interested in supporting young private companies engaged in decarbonization or other green initiatives.