9 Alternatives to Investing in the Stock Market
[ad_1] I often get asked by people, “What are some good alternatives to investing in the stock market?” As a former financial derivatives trader who was in the market 24/7 through the “Great Recession”, I uniquely understand the ups and downs of public markets. I’ve also been actively investing in alternative asset classes for over 12 years. When people ask me about stock market alternatives, they’re usually coming from three main camps: Seeing the ups and downs of the market each day is too much for them psychologically. They’re young, have lived through multiple busts, and basically seen the stock market go nowhere in their young lives. They have a desire to get involved in something that’s tangible or that they can control more directly. After 12 years of seeking out stock market alternatives, I’ve seen a lot so I wanted to share a number of good alternatives that you could gain tangible experience with today. I have personally invested in all of these ideas in some form or another. Whether you have $1,000, $10,000 or $100,000, there are great options for anyone. 1. Real Estate Real estate has been a solid investment for decades. Although there are occasional busts, usually they’re localized and preceded by a frenzy of buying, such as in areas like San Francisco recently. There are a number of ways to invest in real estate. I bought my first commercial property in 2010 from a bank that had to foreclose on it. We turned it around through a lot of hard work, and it’s paid off nicely. GET STARTED WITH FUNDRISE Jeff goes into great detail in his full Fundrise review which is worth checking out, too. Here are some other options for investing in different types of real estate: Farmland – Acretrader Single-family homes – Roofstock Commercial – RealtyMogul ($5,000 minimum) 2. Your Own Home Housing is booming and looking at the state of monetary policy right now, it should continue to boom. Interest rates are at historic lows, so borrowing has never been cheaper. You can put an addition onto your home, buy a better quality home, or simply refinance your mortgage now at a lower rate and return a good amount of cash. I know people who have refinanced their homes into 15-year fixed mortgages and will save over $100,000 over the life of the loan! #ap7431-ww{padding-top:20px;position:relative;text-align:center;font-size:12px;font-family:Lato,Arial,sans-serif}#ap7431-ww #ap7431-ww-indicator{text-align:right}#ap7431-ww #ap7431-ww-indicator-wrapper{display:inline-flex;align-items:center;justify-content:flex-end}#ap7431-ww #ap7431-ww-indicator-wrapper:hover #ap7431-ww-text{display:block}#ap7431-ww #ap7431-ww-indicator-wrapper:hover #ap7431-ww-label{display:none}#ap7431-ww #ap7431-ww-text{margin:auto 3px auto auto}#ap7431-ww #ap7431-ww-label{margin-left:4px;margin-right:3px}#ap7431-ww #ap7431-ww-icon{margin:auto;padding:1px;display:inline-block;width:15px;height:15px;min-width:15px;min-height:15px;cursor:pointer}#ap7431-ww #ap7431-ww-icon img{vertical-align:middle;width:15px;height:15px;min-width:15px;min-height:15px}#ap7431-ww #ap7431-ww-text-bottom{margin:5px}#ap7431-ww #ap7431-ww-text{display:none}#ap7431-ww #ap7431-ww-icon img{text-indent:-9999px;color:transparent} Ads by Money. We may be compensated if you click this ad.Ad #ap7431-w-map{max-width:600px;padding:20px 0 10px;margin:0 auto;text-align:center;font-family:”Lato”, Arial, Roboto, sans-serif}#ap7431-w-map #ap7431-w-map-title{color:#212529;font-size:18px;font-weight:700;line-height:27px}#ap7431-w-map #ap7431-w-map-subtitle{color:#9b9b9b;font-size:16px;font-style:italic;line-height:24px}#ap7431-w-map #ap7431-w-disclosure{margin-top:10px;font-size:12px;color:#9b9b9b}#ap7431-w-map #ap7431-w-map-map{max-width:98%;width:100%;height:0;padding-bottom:65%;margin-bottom:20px;position:relative}#ap7431-w-map #ap7431-w-map-map svg{position:absolute;left:0;top:0}#ap7431-w-map #ap7431-w-map-map svg path{fill:#e3efff;stroke:#9b9b9b;pointer-events:all;transition:fill 0.6s ease-in, stroke 0.6s ease-in, stroke-width 0.6s ease-in}#ap7431-w-map #ap7431-w-map-map svg path:hover{stroke:#1261C9;stroke-width:2px;stroke-linejoin:round;fill:#1261C9;cursor:pointer}#ap7431-w-map #ap7431-w-map-map svg g rect{fill:#e3efff;stroke:#9b9b9b;pointer-events:all;transition:fill 0.6s ease-in, stroke 0.6s ease-in, stroke-width 0.6s ease-in}#ap7431-w-map #ap7431-w-map-map svg g text{fill:#000;text-anchor:middle;font:10px Arial;transition:fill 0.6s ease-in}#ap7431-w-map #ap7431-w-map-map svg g .ap00646-w-map-state{display:none}#ap7431-w-map #ap7431-w-map-map svg g .ap00646-w-map-state rect{stroke:#1261C9;stroke-width:2px;stroke-linejoin:round;fill:#1261C9}#ap7431-w-map #ap7431-w-map-map svg g .ap00646-w-map-state text{fill:#fff;font:19px Arial;font-weight:bold}#ap7431-w-map #ap7431-w-map-map svg g:hover{cursor:pointer}#ap7431-w-map #ap7431-w-map-map svg g:hover rect{stroke:#1261C9;stroke-width:2px;stroke-linejoin:round;fill:#1261C9}#ap7431-w-map #ap7431-w-map-map svg g:hover text{fill:#fff}#ap7431-w-map #ap7431-w-map-map svg g:hover .ap00646-w-map-state{display:initial}#ap7431-w-map #ap7431-w-map-btn{padding:9px 41px;display:inline-block;color:#fff;font-size:16px;line-height:1.25;text-decoration:none;background-color:#1261c9;border-radius:2px}#ap7431-w-map #ap7431-w-map-btn:hover{color:#fff;background-color:#508fc9} How Much Is Your Home Worth In A Refinance? Select your state to get started HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas Get a Free Quote 3. Peer-to-Peer Lending A third stock market alternative that I’m partial to is peer-to-peer lending. If you’re not familiar with peer-to-peer lending, it’s relatively new, but has definitely gained a lot of traction in the last couple of years. There are a few big players in the space, but the top two that you’ll want to check out are Lending Club and Prosper. Jeff has a Lending Club account and has done very well with it. Really quick — what is peer-to-peer lending? It’s exactly how it sounds. You’re lending money to a peer and then you’re getting paid the interest rate. Essentially, you’ve just become the banker to the borrower. It feels nice sitting on that side of the equation for a change. 🙂 Let’s say you invest a thousand dollars in Lending Club. Of those thousand dollars, only $25 would go to one individual borrower, so if that borrower defaults you don’t lose a whole lot of money. Think of it as buying stock in a mutual fund. If one of those stocks in that mutual fund goes belly up, you still have 99+ stocks in that mutual fund still making you money. The same thing happens with Lending Club, and that’s why I like it. It’s diversification; you’re not putting all of your loans into one basket. Again, Jeff’s done pretty well with it which you can see in his Lending Club Review. He’s averaged between an 8.5% to 9.5% return as of today, so it’s definitely worth checking out as a stock market alternative. 4. Gold, Silver, and Other Commodities Precious metals like gold are usually bought in times of extreme financial system stress (the world is ending scenarios) or when high inflation is expected. So, they tend to correlate less with other financial assets. Currently, gold is over $2,000 an ounce! This is being driven by stimulative monetary policy around the world. Other commodities, like copper, aluminum, or grains tend to track along with the economic activity. Since these investments don’t really distribute any cash, they’re often considered riskier investments; however, most portfolio managers advise having some exposure to commodities. You can buy physical commodities or you can invest in financial ETFs that track the physical price. GLD is a gold ETF. ETFs for metals and commodities can be bought through any online brokerage account. 5. Cryptocurrency This one scares people, but I continue to believe in certain cryptos for the long run as digital money native to the internet. I’ve invested in cryptocurrency since 2014, and while I’ve traded in and out of many currencies, I’ve held a core position in Bitcoin, Ethereum, and a few others. Bitcoin, in particular, has been around since 2011, and use cases continue to improve. Luckily, I’ve been able to make some significant
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