The highly volatile stock markets have driven investors to tap into the world of alternative investments. While most alternative assets tend to be a second option for investors, they have often delivered higher returns historically compared to traditional equity investments.
Top-Performing Alternative Investment Options
Fractional Real Estate
The housing crisis in the U.S. has made it challenging for budding investors to tap into highly profitable real estate. This circumstance comes as record-low interest rates over the last two years propped up the demand for housing. While the latest interest rate hikes have cooled down the once-hot U.S. housing market, average home prices are far from affordable.
However, high home prices don’t mean that you can’t invest in real estate. The fractional real estate model allows investors to get ownership of a proportion of a house or commercial property. Thanks to Regulation A Real Estate Crowdfunding, investors can get fractional property ownership with as little as $100.
With an increasing number of billionaires globally over the past two years, fine wine demand has skyrocketed. Certain Bordeaux and Chablis wine prices have surged more than 50% over the past year, outperforming many stocks. The low supply of fine wine has also contributed to surging prices over the past two years. Only 5% of the wine produced worldwide is considered investment grade.
Private debt is one of the best alternative investment options for risk-averse investors. In fact, it is the third-largest alternative asset class. As the Federal Reserve is poised to maintain its aggressive rate hike stance in the near term, interest on loans is expected to rise significantly in the near term. Moreover, private debt investment typically yields higher returns compared to traditional debt securities such as Treasury bills and commercial paper.
Cultural assets such as contemporary art have outperformed the benchmark S&P 500 index over the past 25 years. The cultural significance of such assets makes them highly coveted and resilient to market risks. John Plassard, deputy director at asset manager Mirabaud, described contemporary art as “one asset that seems to have stood the test of time and escaped the grip of volatility.”
Related News Highlights in Alternative Investments
- Vacation rental investment platform Here is set to launch a new offering for its San Diego property with a $100 minimum investment. The company says vacation rentals generate up to 160% more revenue on average than traditional long-term rentals, according to data from Zillow and AirDNA.
- The private debt investment platform Percent launched a new corporate debt offering for Taiger, an international, VC-backed software company, with a 15-17% APY. The platform’s recent H1 update shows an average historical yield of 12.38%.
- The securitized wine investment platform Vint is launching its largest offering to date this week – Bordeaux En Primeur 2021 Collection at $50 per share. Merlot yields in the Bordeaux region were impacted by cold temperatures and early frost in 2021, leading to lower volumes and higher demand for the vintage.
Find more news and alternative investment offerings on Benzinga Alternative Investments
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