In this article, we have listed the 10 best investments that accredited investors should look into. Read on to learn more about the alternative investment opportunities that will help you make more money!
Crowdfunding Real Estate
Real estate crowdfunding is the process of gathering a group of investors to raise funds for a real estate project. Through crowdfunding, investors have been able to take part in lucrative investments that they previously would not be able to finance.
It’s an excellent way to generate passive income with little risk, as you benefit from acquiring high-value properties by sharing the cost with other like minded investors.
Holdfolio specializes in helping accredited investors diversify their portfolios with multifamily holdings that generate considerable returns.
On average, across 3,020 units, the cash return for Holdfolio investors was 19.53%! That’s around double the average return from the stock market over the last century.
Investing with Holdfolio provides all the benefits of crowdfunding your own deals with none of the negatives.
Spearheading your own multifamily crowdfund is a headache as you need to worry about:
- Finding and convincing investors
- Chasing those investors for payments
- Buying and negotiating properties for sale
- Day-to-day management of the property
- Finding tenants to rent the space
Save yourself all these headaches and get the same high-returns by signing up for Holdfolio’s investor portal today.
The process couldn’t be simpler. Visit our accredited investor crowdfunding page, sign up to our online investor portal for free, choose one of Holdfolio’s exclusive listings to invest in, deposit your money and that’s it!
Venture Capital for Startups
Venture capital (VC) is a type of private equity and a type of financing provided by investors to startups and small enterprises with the potential for long-term growth.
Investment banks, wealthy investors, and other financial institutions provide venture funding. It does not always have to be in the form of money; it can be in the form of technical or management skills. Small businesses with outstanding development potential, or businesses that have expanded swiftly and are poised to expand, are frequently given venture capital.
While putting money up can be dangerous, the possibility for above-average profits is enticing. Venture capital funding is gradually becoming a popular source of money for new companies or projects with a short working history (under two years), especially if they lack access to capital markets, bank loans, or other debt instruments. Investors typically receive shares in the company and consequently a say in company decisions.
Both accredited and less affluent investors have the opportunity to invest in venture capital. Funds, stocks, venture capital debt, and direct investments are all examples of these types of investments.
Hedge funds, like ETFs and mutual funds, are professionally managed funds, but they are subject to far less regulation in terms of how they invest their money. In comparison to other funds, this permits them to invest in more intricate projects or asset types.
When compared to more popular ETFs and mutual funds, the ability to invest in these alternative investments and apply advanced investment strategies (shorts, options, derivatives, etc.) modifies the risk and reward profiles of these funds.
Hedge funds can be highly expensive in terms of fees, but they are comparable to other products available to accredited investors. Hedge funds allow you to invest in a certain money manager or a fund that follows a specific investing concept that appeals to you. This could enable you to participate in an investment strategy that you don’t have the time or competence to implement on your own.
After researching the fund managers and investment objectives of those funds using Form ADV, you’ll need to call a hedge fund and inquire about minimum investment requirements. You’ll also need to prove that you’re a qualified investor. There is no centralized accreditation authority or defined system in place. Each fund uses its own methods to determine your eligibility. You may be required to give proof of your income, assets, debts, and experience through licensed third parties, such as a financial institution with which you have accounts, an investment advisor, or an attorney.
This alternative investment can be appropriate for you if you are an art collector or an investor who enjoys art. The worth and value of each piece are determined by its individuality. Costs can be very large and illiquid.
These types of investments are deeply sensitive to the age of the artwork and other particularities. Exclusivity brings greater pricing, but also larger profits. The artist’s celebrity is also a significant factor.
There are platforms and tools available that can assist you in making a well-informed investment decision. Thanks to sites like Masterworks, investing in fine art has become easier in recent years.
Merchant Cash Advances
A merchant cash advance provides a business with a lump sum of operating capital for a specific and immediate requirement. In exchange for the security of an immediate financial input, the company pays a portion of future sales. This is a short-term loan, usually ranging from three to twelve months. Unlike traditional loans, financing is not regulated, which means that business owners can utilize the funds any way they see right.
There is the potential for large profits in addition to the inherent value that is supplied. Returns can be substantially greater than those available in standard high yield investments in the public markets.
Adding alternative assets like merchant cash advances to your investment portfolio can help you reduce risk and protect your portfolio from instability. The stock market and merchant cash advances have little in common. A mix of traditional and merchant cash advance investing would produce a healthy, well-balanced return.
Platforms for merchant cash advances, such as Supervest, connect investors with merchant funding organizations that pool their funds for specific businesses.
Unlike past methods of investing in MCAs, this platform greatly reduces risk. A maximum of 5% of an investment can be made in a single business at a time. Hundreds of companies can be invested in at the same time by investors.
Non-fungible tokens (NFTs)
NFTs are digital assets that are kept on the blockchain and represent unique ownership of that item.
The industry grows in popularity. OpenSea, an NFT trading platform, experienced more than $1 billion in trading volume during August 2021. According to a Wave spokeswoman, more than $2 billion in NFTs were traded in the first quarter of 2021, 131 times the volume in the first quarter of 2020.
As a financial professional, investing in NFTs during a sideways drifting market appears to be profitable thus far. Since they have only been an emerging crypto asset class for a few years, the non-fungible token market has experienced spectacular volume gains year after year. From the first half of 2020 to the first half of 2021, the total market volume increased from $13.7 million to $2.5 billion.
It could be a good idea to consider NFTs as a means to diversify your portfolio by potentially investing in these investable assets to add or subtract risk to your holdings. NFTs have limitless applications and tokenization possibilities for both tangible and intangible things. From combating avatars to creating eternal works of art, the future of NFTs is dependent on the free market’s limitless ingenuity.
Though lacking the allure and media darling status of NFTs or cryptocurrency, the $20 trillion commodities market—a financial sector where raw materials are transacted—continues to be a preferred investment vehicle for accredited investors who favor strong returns and need an investment that will weather high inflation or a weakening dollar.
The term “commodity” may be new, but its goods are found throughout daily life. The gas powering automobiles was one oil traded on a commodities market. The gold found in cell phones was once traded as a commodity. Rubber, wheat, electricity—these are all traded as commodities before they get to consumers.
Because of persistent demands for these goods which rise in times of high inflation, commodities are a class of investment that does well against weakening currencies. When the dollar or another form of currency loses buying power, prices rise and so too do the price of commodities.
One should not mistake these for uniquely stable investments, however. Individual commodities are notoriously volatile and should be part of a diversified portfolio that includes other commodity types and investments.
A good way to get started in this investment type is through a commodity fund, which is a collection of commodities. Similar to the way a hedge fund invests in a range of securities, a commodity fund like BlackRock offers investors a share of a basket of commodities to minimize the risk of their fluctuating price for investors who want to enjoy the strong returns they offer. Commodities have an annual gross exceeding 20 percent, double that of the average stock.
Cryptocurrencies have exploded into the spotlight as their own asset class in the previous five years. Cryptocurrency data demonstrates that in the last ten years, they’ve grown from nothing to a market valuation of about $2 trillion. Without a doubt, it’s been a phenomenal rise. In terms of the magnitude of returns investors have made, this is the quickest rise of any asset class in history.
Unlike conventional currencies, cryptocurrency is supposed to be a store of value that is immune to depreciation and inflation. In times of economic distress, governments print money to compensate for the imbalance, which leads to inflation, which can swiftly spiral out of control. Cryptocurrency prices, on the other hand, are unaffected by the influx of cash that would otherwise depreciate government-issued fiat currencies. So, how do you get started with cryptocurrency investing?
Many trading apps allow you to buy popular cryptocurrencies such as Bitcoin, Ethereum, XRP, and others. eToro, a social investment software that allows users to replicate the trades performed by expert crypto traders on the site, is the finest tool we’ve found for investing in cryptocurrencies.
Buying and selling online businesses is one of the up-and-coming alternative investments for accredited investors. Websites are the virtual world’s real estate. Many see buying and selling websites as business investments in the same way that some individuals choose to invest in properties.
To acquire ownership of a website that generates a reasonable monthly income, one needs to be willing to spend at least 10 months of earnings. Because the labor involved in running most websites can usually be outsourced fairly cheaply, sellers frequently sell because they desire a huge lump amount to spend in other ventures.
There are a number of online investment platforms, such as Empire Flippers, that connect accredited investors with well-established online entrepreneurs. Investors get to choose which firm to invest in based on the track record, acquisition criteria, and strategy of the business operator. Until the business is sold in 2-4 years, investors will get quarterly payments and reports.
Collectibles are goods that are worth significantly more than their initial purchase price and are classified as alternative investments—vehicles that do not fit into any of the other categories, such as stocks, bonds, cash, or real estate. Investing in this asset class can be both rewarding and beneficial to your financial goals.
There are various collectibles that one can choose to focus on. Here are some of the most common and profitable collective items:
Wine: It’s widely understood that wine improves in quality and value as it ages. Some wines, on the other hand, are better suited to collecting than others. For example, Sotheby’s auction house in 2017 sold five bottles of a 1945 Romanee-Conti burgundy for $1.98 million. Before the vines were destroyed, only 600 bottles were created.
Fine Art: Paintings by great painters from the past are almost priceless, which is why acquiring fine art can be a financially rewarding investment. For example, in 2018, a painting by living artist David Hockney titled “Portrait of an Artist (Pool with Two Figures)” sold for $90.3 million at a Christie’s auction.
Celebrity Items: Celebrity-related products can be considered valuable, and some individuals are willing to pay a high price for them. Russell Crowe sold personal belongings to fund his divorce in April 2018. The armor he wore in the movie “Gladiator” sold for $117,000 at a Sotheby’s auction titled “The Art of Divorce,” and his leather jockstrap from “Cinderella Man” sold for $6,500.
There are more items that can be collected by those who are interested such as coins, classic automobiles, stamps, vintage jewelry, antique furniture, and more. Such items can be found and auctioned over online platforms such as Collectable, one of the best auction websites.
Alternative Investments: A Smart Compliment to a Solid Investment Foundation
We’ve listed some of the best alternative investment opportunities for accredited investors. We highly suggest that any investor who’s interested in these alternative investments study the risks and benefits before diving in. Here at Holdfolio, we have a team of professionals who can help you on how to diversify your portfolio and your investments to get the best out of passive income investments.
Holdfolio combines knowledge, strong partnerships, and innovative technology to deliver high-yield, professionally managed real estate opportunities to passive investors. So visit our accredited investors page today to begin growing your wealth.