Investing in the stock market has long been considered one of the most popular ways to invest. However, not everyone is comfortable with stocks’ volatility and unpredictability. Thankfully, investing is not limited to the stock market alone.
There are different investment options for those who want to invest without involving the stock market. This article aims to provide you with six investment options that can help you grow your wealth, reduce risks, and diversify your investment portfolio. Without any further ado, let’s dive deep:
6. Real Estate Investing
First up: Real estate investing can provide excellent returns with steady income streams, and stable and predictable cash flows. Plus, potential long-term capital appreciation.
Real estate investments can range from owning rental properties, investing in REITs (Real Estate Investment Trusts), and crowdfunding investments via online platforms, among others. The key to success in real estate investing is being able to identify lucrative markets and carefully evaluate each property’s potential.
5. Peer-to-Peer (P2P) Lending
Next up: P2P lending offers a unique opportunity to invest in fixed-income investments without the stock market. With P2P lending, investors lend money to individuals and businesses through lending platforms. These include such as Lending Club, Prosper, and Upstart.
So, P2P lending can offer higher rates of return than traditional bonds and is less volatile than stocks. However, investing in P2P lending has its risks and requires thorough due diligence to ensure investing in the right borrower.
4. Certificates of Deposit (CDs)
Certificates of deposits are low-risk, savings-like investments that offer a fixed rate of return over a set period. CDs are available through banks and credit unions and can range from a few months to several years in duration. The best part? Well, a CD investment is insured by the FDIC up to $250,000, thus making them a safe investment option.
3. Commodity Investing
Commodity investing involves investing in raw materials such as gold, silver, oil, soybeans, and other commodities. Commodities can provide diversification when added to a diversified portfolio.
Plus, commodities prices are affected by supply and demand, weather conditions, and other factors. Consequently, this makes the prices of these commodities fluctuate over time.
2. Private Equity
Private equity investing involves investing in private companies, start-ups, and venture capital firms. Private equity firms help fund new businesses and entrepreneurs by providing them with the capital required to start a company.
However, this type of investment has the highest potential for returns but is also the riskiest.
1. Crowdfunding
For individuals who want to invest in start-ups and small businesses outside of the traditional private equity route, there is crowdfunding. Crowdfunding has become an increasingly popular option for investing. Equity crowdfunding allows investors to purchase shares of equity in start-ups and small businesses through online platforms.
Nonetheless, crowdfunding investments are considered high-risk. Therefore, it is essential to invest after thorough due diligence.