With the rise of Silicon Valley and the Fintech disruption it has brought to the finance industry, the digital landscape now not only offers a whole new host of traditional investment opportunities for your DIY retail investor but is giving everyone access to asset classes once reserved for banks, institutional investors, hedge funds, and the super rich. Here are five alternative investments for those bored with the same old stocks and bonds:
1. Consumer Lending
The original Fintech alternative investment, peer-to-peer lending companies like Lending Club and Prosper offer regular investors a chance to act as their own private bank, funding unsecured loans to a variety of borrowers. Using the companies’ online platforms and underwriting data, investors can commit as little as $5 to individual fundings in order to build an overall portfolio based on targeted return and risk tolerance. New entrants to the industry, like Upstart, now offer investors the opportunity to lend to small businesses and start-ups along with consumers. To find out more about the top P2P lenders, check out Forbes analysis here.
2. Commercial Real Estate
Not to be outdone, commercial real estate lending has also made itself available to the masses through crowdfunding sites like RealtyMogul and Crowdstreet. For as little as $5,000, investors can create portfolios based on underwriting and analysis for the sites’ platforms and even take digital tours of properties.
With just about every one, including their inventors, saying the market is a classic bubble, cryptocurrencies have been skyrocketing in recent months. While Bitcoin is by far the most famous and has seen astronomical gains, there are plenty of other offerings like Litecoin and Ripple that have enjoyed their own steady rises. If you can’t help but get in on the frenzy, Coinbase is a great resource to help you purchase and track your investments in every major digital currency.
4. Start-up Employee Stock Options
Just about every start-up entices its early employees with stock options. Until recently, an employee would have to wait, sometimes years, for a buyout or an IPO to realize any monetary gain. Now, enough demand exist that a secondary market has been created where start-up employees can sell their equity or options. EquityZen offers qualified investors a chance to purchase equity and options from current and former employees at pre-IPO start-ups. Individual investor access is limited to high net worth individuals, but if you are interested talk to your personal financial advisor about the opportunity for access through his or her office.
5. Blue Chip Automobiles
Think the value of a 1963 Ferrari 250 GTO is going to rev upward in the next few years? Now, instead of having to purchase the car and maintain it, you can make a profit off its increase in value without raising a wrench. RallyRd offers investors a mobile app to purchase shares in “blue chip” collector cars, an asset class it claims has outperformed the S&P 500 and gold since 2012. The app is only on iOS for now.
All of these investments come with plenty of risk, and often the only analysis of these investments comes from the platforms trying to sell you on them. But if you’re looking to spice things up, and if you can handle the increased downside risk, alternatives like these might be the place to go.