While seeking financial advice, most advisors would tell you to invest in stocks or mutual funds. Their job is to guide you through the process and build up a portfolio so you can slowly increase your presence in the stock market and generate profitable results.
However, stocks aren’t the only way to earn money – there are few equally beneficial alternatives:
These are usually regarded as conventional investments and are one of the common substitutes for the stock market, especially when it is not stable. Bonds are basically debt-oriented investments, known as fixed-income securities with a fixed or variable interest rate within a particular time period. There are several type of bond such as junk bonds, corporate bonds, Treasury bonds and municipal bonds. Make sure to research carefully before investing.
Being a substantial inflation hedge, investing in gold is a wise decision, because it gives you great returns is a liquid asset at the same time. Due to its low correlation with other asset classes, it doubles as a lucrative rescue asset in tough times. You can buy gold coins or bars, get gold exchange-traded funds, invest via gold mining stocks or hold gold accounts.
Even though this technique is popular for investments, it is a relatively new opportunity, so exercise caution while approaching. Investors have generally reported positive returns so far. The idea is simple – if you are an investor, you can lend small amounts to peers who will pay it back with interest. There is a bit of risk involved – you can end up with losses if the loans go into default status. To be on the safe side, it is advisable to split the lending amount among several borrowers, as it lets you maintain a diverse portfolio.
Certificates of deposit, referred to as CDs are saving investments authorized by a bank, which offers rewards on a long-term basis. Interest rates on CDs are fixed, but significantly higher than those offered on savings accounts. However, you need to leave the money untouched for a certain period of time. You might incur penalties if you use the CD for cashing money before the stipulated time. Ideally, you should invest in numerous certificates with different maturity periods, thereby spacing out returns accordingly.
Want to invest in something tangible? Real estate is your best bet! Read up thoroughly about the housing market before deciding. Purchase income property or shares in a REIT (Real Estate Investment Trust) but only when you know all the ins and outs.