Alternative Investments

Best Alternative Investment Platforms • Benzinga

Different financial advisors take different approaches to investing. But the piece of advice that nearly all of them give almost all of their clients is to diversify their portfolio. The logic behind this is simple. Even the best investments go through down cycles, which means putting all your investment eggs in 1 basket is inherently risky. Diversifying your portfolio minimizes the risk that all your investments go south at the same time.  One of the best ways to diversify your portfolio is by making alternative investments.

What is an Alternative Investment?

Any investment you make in something outside of stocks and bonds is considered an alternative investment. It may sound exotic but in reality, people have been making alternative investments for a long time. Historically, real estate and gold are 2 of the most popular alternative investments. You can diversify your portfolio by making alternative investments as supplements to your stocks and bonds, or you can have a portfolio that consists entirely of different alternative investments.  

Types of Alternative Investments

As discussed in the section above, real estate and gold are 2 of the most commonly held alternative investments. With that said, there is a multitude of alternative investments you can make. Examples of alternative investments include the following:

The Best Alternative Investment Platforms

One of the miracles of the internet is how much smaller it has made the world of investing. Before the internet, if you wanted to make an alternative investment in wine or art, you’d have to have a wine cellar or warehouse to store it in. Then you’d have to arrange security and insurance for the investments. It would literally be a full-time job. 

But thanks to the internet, there are now dozens of alternative investment platforms where you can pick and choose what to invest in while someone else does the heavy lifting. Some of Benzinga’s favorite alternative platforms are listed below.

Alumni Ventures

Chosen as the Best Alternative Investment Platform in Benzinga’s 2021 Fintech Awards, Alumni Ventures gives individuals access to venture capital investments that would otherwise be out of reach. Investors can choose between the platform’s various funds to suit their own investment criteria and goals, and invest alongside one of the most active VC firms in the country.

Alumni Ventures’ portfolio currently consists of over 800 companies and the platform has raised over $800 million.


Get started

securely through Alumni Ventures’s
website

CrowdStreet

CrowdStreet is a real estate crowdfunding platform that offers investors the chance to purchase equity shares in various real estate investments around the country. It’s a great way to get involved in real estate, but you must be an accredited investor to buy into any CrowdStreet offerings. That means only investors who pass a certain net worth threshold are eligible.

If you are accredited, CrowdStreet offers some great investment opportunities with the potential for very high returns. The downside is that the minimum buy-ins are on the high side, and most CrowdStreet investments don’t pay dividends for several years. 


Get started

securely through CrowdStreet’s
website

Best For

Accredited Investors

1 Minute Review

Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.

CrowdStreet’s platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.

 

Best For

  • Accredited investors
  • Long-term investors
  • Investors looking to diversify from stocks
Pros

  • User-friendly interface
  • Diverse investment offerings
  • Great investor resources
  • Proven performance history
  • Many offerings eligible for inclusion in self-directed IRA
Cons

  • Accredited investors only
  • Most offerings require a $25,000 minimum investment

DiversyFund

DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.


Get started

securely through Diversyfund’s
website

Best For

Low Cost Real Estate Investing

1 Minute Review

DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.

Best For

  • Those looking for an alternative investment beyond stocks and bonds
  • Individuals who aren’t sure they want to be landlords in the traditional sense
  • Investors who aren’t accredited
Pros

  • Only need to pony up $500 to get started
  • Open to investors all over the world
  • No expensive broker fees
Cons

  • You’ll only be able to access “blind pool” investments, which means that you can’t opt out of specific properties
  • There’s only one real investment option, the DiversyFund Growth REIT

Groundfloor

Groundfloor is an alternative real estate investing platform that offers investments in high-yield, short-term real estate loans. The platform is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with an average of 50-70 investments available at any given time.. 

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. The low minimum investment allows investors to easily diversify their Groundfloor portfolio across multiple loan offerings. 


get started

securely through Groundfloor’s
website

Best For

Non-accredited Investors

1 Minute Review

Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments. 

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans. 

Best For

  • Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
  • Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
  • Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.
Pros

  • Charges the lowest minimums in the industry
  • 0 investor fees
  • Open to non-accredited investors
Cons

  • Offers no bankruptcy protection
  • High rate of an uncured default
  • Many loans are for judicial-only states

Masterworks

This alternative investment platform is based on fine art. It identifies select artists and buys works, which are then registered with the Securities and Exchange Commission (SEC) as a regulation A share offering. Investors will then share in the profits when the artwork they’ve invested in is sold. 

Masterworks features works from famous artists both living and dead. In fact, it even has works by Banksy — the pseudonym of the England-based Street artist.  This is, however, a long-term investment. Unlike investment real estate, there is no residual income generated by Masterworks investments, and investors must be willing to wait for several years before earning a dividend. 

1 Minute Review

Have you ever dreamed of owning a Basquiat painting or one of Warhol’s pop art masterpieces? You can with Masterworks — even if you don’t have $1 million in the bank. 

Masterworks is a new platform that allows investors to own shares of famous works of art. Artwork is held in a climate-controlled, secure environment while Masterworks searches for an independent collector or buyer to sell at a profit. When a piece is sold, you’ll receive a share of the profits proportional to your initial investment.

Investors will enjoy Masterworks’ easy-to-follow system and choice of famous art investments.

Best For

  • You want to diversify your portfolio with alternative, specifically art, investments
  • Earn returns up to 8-30%
  • You’re interested in investing in art
Pros

  • A dedicated art membership rep that will help you invest and answer questions
  • Clean, attractive, easy to use platform design
Cons

  • Requires a phone interview before you can invest
  • Fee can be confusing for new investors

Vinovest

Anyone who has ever been to a fancy restaurant and ordered a bottle of wine knows it can be expensive. That’s because wine is produced in finite quantities, and fine wine is in high demand worldwide. That makes it a great alternative investment. Vinovest has responded to that by setting up a wine-based alternative investment platform. 

Investors in Vinovest can choose from a variety of different wines to add to their portfolio for a minimum $1,000 investment. Once chosen, Vinovest protects the wines in its own vault and will even ship some or all of the chosen vintage to the investor. Vinovest also guarantees the authenticity of all its offerings, which, given how much counterfeit wine there is in the world, is a big plus for investors.  

Minimum Investment

$1,000

1 Minute Review

Vinovest is a platform that’s breaking down barriers of the once gatekept world of wine investments. Vinvovest makes investing in wine easily accessible by offering fully-managed wine portfolios designed with artificial intelligence and industry experts. 

The platform manages the bulk of the wine investment process, from selecting, acquiring, insuring, securing and storing authenticated bottles. Investors are able to monitor their wine portfolio online and even access their wine supply in real life, anytime. Vinovest combines the knowledge of experienced sommeliers, wine directors at Michelin star restaurants, as well as leaders from giants like Apple (NASDAQ: AAPL), Bytedance and more. The end goal is to offer investors access to fine wine investments that deliver the potential for solid returns and diversification. 

Vinovest is a leading wine investment platform and for good reason. Take a look at all the pros and cons to Vinovest, as well as all the factors that make this platform stand out in the world of wine investments. 

Best For

  • Access to the wine investment market
  • Portfolio diversification
  • Fully managed portfolios
  • Alternative assets
Pros

  • Open to all investors (accredited and non-accredited alike).
  • Wine investments have low market correlation.
  • Learn from wine experts and tech leaders.
  • Provides fully-managed portfolios.
  • Wine is insured, authenticated, stored and more.
  • Transforms wine investments into liquid assets.
Cons

  • Minimal information on how portfolios are constructed.
  • Selling a portfolio can take several weeks to liquidate.
  • Vinovest is a relatively new platform.

Conclusion

Alternative investments may sound like a fancy, New Age concept, but that’s far from the truth. In fact, if you own real estate, you have already made an alternative investment. Many people who see the wisdom of investing, but are put off by the volatility of the stock market, have been gravitating toward alternative investments for quite some time. With that said, it’s important to remember that there is an incredible variety of alternative investments outside of real estate or even gold. The rise of internet-based alternative investment platforms has opened up a whole new world to potential investors.

Now you can buy shares of startup companies, wine futures and even sports collectibles as alternative investments. Some have high payoffs and an elevated risk level, while others may require investor accreditation and the ability to wait a long time before earning a dividend. 

Other alternative investments have an active secondary market that allows you to liquidate your shares quickly. The variety is nearly limitless. Alternative investments can be a great way to diversify your portfolio, but you still must consider the risks and choose wisely. As always, Benzinga is a great place to go for neutral information on all the pluses and minuses. 

Frequently Asked Questions

What are some examples of alternative investments?

1

What are some examples of alternative investments?

asked

Eric McConnell

1

Any investments made in something aside from stocks and bonds are considered to be alternative investments. Examples of popular alternative investments include the following:

  • Gold
  • Real estate
  • Wine futures
  • Sports collectibles
  • Startup companies
  • Art and fine art

answered

Benzinga

What are the best alternative investments?

1

What are the best alternative investments?

asked

Eric McConnell

1

The answer to that question depends on several factors, and the answer will vary depending on the needs of each investor. Long-term, accredited investors might like REITs, but there are also real estate offerings for nonaccredited investors as well.

Other investors may already have real estate holdings and want to buy into niche investments that pique their personal interests such as wine or sports collectibles. In all cases, investors have to consider their liquidity and individual risk tolerance before deciding what investment is best for them. What might be right for one, may not be right for another.

answered

Benzinga

DiversyFund accelerates your wealth creation by reinvesting cash flows from the properties — the DiversyFund Growth REIT is a public non-traded REIT designed to build wealth by investing in multifamily real estate and intends to build wealth over an approximate 5-year timeline. You don’t have to be an accredited investor to invest in Diversyfund. Open a Diversyfund account today.


Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button