7 Alternative Investments You Can Invest in Today

Alternative investments have gained significant popularity in recent years, offering investors a diverse range of options beyond traditional investment avenues. Understanding each of these options is crucial before diving into alternative investments. Here, we break down the 7 best alternative investments available today. By exploring these options, investors can make informed decisions about which alternatives align with their investment goals. 

Real Estate

Real estate stands out as one of the most widely recognized and highly favored alternative investments. The primary objective of most real estate investments is to generate a consistent cash flow that corresponds to the investment's value.

Certain real estate investments prioritize growth by targeting dynamic and flourishing markets where property values are rapidly appreciating. In these cases, the focus is on purchasing and selling properties within these thriving markets. Investment managers, as well as individual investors, frequently employ funds to acquire, develop, and subsequently sell properties in these lucrative areas.

Infrastructure

Infrastructure investments are closely related to real estate investments, as they revolve around the ownership of specific real properties that generate value. For instance, an investor might possess assets like an oil rig, a section of an oil pipeline, a cell phone tower, and various other infrastructure elements.

Private Business

Investing in private businesses entails purchasing shares of companies that are not publicly traded. Although this type of investment carries risks, as some companies may fail before achieving a successful buy-out, there is also the potential for substantial returns. Many individuals who have successfully grown their own businesses opt to invest in other private enterprises, leveraging their expertise to serve as advisors and contribute to the growth of these businesses.

Private business investing encompasses various forms, including angel investing. Angel investors provide initial financial support to emerging companies, often during their early stages. Additionally, venture capital investments form another aspect of private business investing, involving subsequent investments in more established and mature businesses.

Precious Metals

Precious metals, like gold, silver, and platinum, hold the status of assets. They can exist in the form of coins with numismatic value or simple bullion bars for storage. Many investors find precious metals appealing as alternative investments due to their reputation as non-correlated assets (although this correlation can vary depending on the overall portfolio).

Usually, individuals who invest in precious metals prefer to directly own these assets instead of owning an ETF that tracks the metal's value. This ownership provides them with the reassurance that their investment can be utilized during difficult times.

Commodities

Investing in commodities involves the buying and selling of assets through exchanges at predetermined prices. The most common commodities include agricultural crops like wheat or corn, energy resources, particularly oil, and precious metals as previously mentioned. Commodity investing can be intricate, especially due to the involvement of the futures market, which compares the future value of a commodity.

Interestingly, commodity investors are not necessarily owners of physical assets like warehouses filled with crops or oil rigs. Many investors engage in digital investing, ensuring the balance between supply and demand and profiting as intermediaries.

Investors have the option to purchase commodity funds through publicly-traded mutual funds and exchange-traded funds (ETFs). It's important to note that commodity funds may exhibit short-term price volatility, but they generally serve as reliable safeguards against inflation in the long run.

Fine Art And Collectibles

Valuing fine art and other collectibles presents a challenge due to their unique nature as one-of-a-kind items. Fine art and collectibles have long been sought-after alternative investments, historically accessible primarily to the ultra-wealthy or fortunate few.