The March crash caused a lot of turmoil in the stock market, leading to some investors saying that bonds and stocks are way overvalued. While bonds and stocks are the traditional path for investment for anyone who wants to try and make a bit of side money, the more you diversify your assets, the better off you’ll be.
So, what does diversifying your assets in 2020 look like, then? Let’s take a look at what we think are three of the best stock and bond alternatives right now that you need to consider investing a bit of money into.
1. Gold
Investing in gold is not a new concept, but it might be for you if you’ve spent the last 20 years investing in stocks. Traditionally, gold has been seen as a hedge against possible inflation and a way to store value. It is a great alternative to bonds and stocks because it is an asset that most people know. Gold is known as being a ‘safe haven’ when it comes to having assets in unpredictable times.
The good news is that gold managed to hold onto its status as a safe bet against more volatile investments during the crash back in March. Since June, gold has continued to outperform stock markets. So, while gold has its place in a portfolio that relies on diversification, it might not perform as well as stocks in the long term. It’s all about finding that balance between what you’re prepared to risk and what you’re not.
If you think that 2020 is a good year to invest in gold, you’ll need to boost your fund a little bit. Look up ‘title pawn’ or ‘short-term loan’ if you need to bridge the gap and put your money where it’s going to do well.
2. Cryptocurrencies and Bitcoin
One investment that has gained a lot of momentum over the past few years has been Bitcoin and other cryptocurrencies. In layman’s terms, cryptocurrencies are digital or virtual currencies. They don’t actually exist as gold does, and a government does not back them in terms of value. Blockchain is the public list where every cryptocurrency transaction is recorded.
Bitcoin is by far the most popular cryptocurrency currently out there and most well known. Because there is a finite number of Bitcoin that can be bought and sold, it retains its value and can be invested in. However, while it might retain a bit of value, this value can fluctuate a lot, which is why it’s pretty risky to invest in it.
This is still very much a niche investment, so consider this when you’re thinking about something like Bitcoin.
3. Collectibles
Another form of niche investment is collectibles. This is anything from designer handbags to wine and watches, and even art. There are a lot of people out there who claim to purchase watches and designer handbags as an investment, but is this accurate?
If you want to invest in collectibles, you’ve got to know which ones to invest in. This is applicable to all different types of collectibles. If you choose wisely and find the right brands to invest in, then you will be able to keep your item as an asset because it will retain its value.
If you want your collectible to hold its value, then you need to find something that’s at the high end of the market. It’s also important that you get expert advice when choosing your pieces so that you can make the right choice. If you don’t make the right choice and you purchase something that’s a liability, you could end up losing more than what you paid for it.
Finding something new to invest in as an alternative to stocks and bonds is worthwhile – if you know what you’re doing. Make sure that you get some advice and find the best investment plan for your situation.
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