With 2021 now firmly in full swing, there has never been a better time to think about what assets might help your portfolio swell in value over the course of the next 12 months.
Investing in traditional assets, such as stocks and shares, can have high barriers to entry – especially if you’re new to investing or you don’t have the time to do the hard work of looking into which exact stock is best for your risk profile. The good news is that there are plenty of alternative options available to pick from – and while none of them are easy rides, they may well prove to be better suited to you than the typical asset classes. This article will help you decide which route is best for you.
Luxury goods
Investing in luxury goods can sometimes seem a bit passé, at least from an aesthetic point of view. Classic cars, fine wines and other high-end items are more reminiscent of the Roaring 20sworld of The Great Gatsby than they are of the sleek glass of modern Wall Street! However, the truth is that a finely timed investment in an item like this can pay dividends over the long term.
While there’s no way to predict what will happen next, it’s clear that one of the advantages of this asset class is that luxury goods have tended to hold their value in a way that is removed from wider political and economic factors. In one year of the last decade, for example, the value of jewelry was stronger than the value rises of buildings in the center of London! Vintage items are only ever going to get older – and as long as age plays a role in determining value, this could hold investment appeal.
Real estate
It may surprise some readers to see real estate considered an unusual asset. Home ownership is, after all, a key part of American culture. However, real estate as an investment is very different from a personal purchase of a family home – and it’s perhaps true to say that it’s not quite as easy as it once was to invest in property. Before the financial crisis, banks were giving out loans with what is now considered by many to be wild abandon. Since some of that debt went bad and the crash happened though, it’s now the case that banks are loathe to lend quite as much as they did previously.
Many who may previously have got around tighter mortgage restrictions by paying in cash now do not have that option open to them. The good news is that there are now other ways to invest in real estate that are not quite as well known. One of these is the net lease fund, such as that operated in New Hampshire by the prolific businessman Jeff Sica (who is also known for investing in Broadway musicals, tech firms and more). Net lease funds are designed to provide passive income without maintenance costs – meaning that they appeal to many investors.
Cryptocurrency
Cryptocurrency is undergoing a real resurgence in public interest right now, not least given the news story of investor Stefan Thomas who has just two attempts left at entering his password to try to recover some US$220m in frozen bitcoin. However, despite these dizzying numbers, cryptocurrency is still not a huge part of the portfolios of most modern investors.
As with all asset classes, there’s no crystal ball available to determine what might come next for Bitcoin and the other cryptocurrencies. However, it’s definitely true to say that there’s a world of choice out there. Altcoins such as Ethereum, for example, have also seen value rises in recent months: the value of that coin in particular has risen by 25% in the one-month period between December of last year and right now.
Crypto is especially popular with investors who have personal values-based reasons to avoid trading in the stock market or other typical investment destinations. Crypto is traded using a decentralized ledger, meaning that there’s no single authority in charge of each coin – offering additional privacy options that some investors require, for various reasons. If this applies to you, it could be worth exploring crypto investments in 2021.
If you’re thinking about boosting your financial security over the course of 2021, now’s the time to do it. If you’re not certain how to proceed when it comes to typical assets such as stocks, don’t worry. As this article has shown, alternative assets such as luxury goods, cryptocurrencies and even the present-day iteration of real estate investment are all available to choose from – and could well be what you need.
