Looking for ways to diversify your portfolio and boost returns? This list of the best alternative investment platforms is a great place to start.
Quick Look at the Best Alt Invest Platforms
- Best for Fractional Real Estate: Arrived Homes
- Best for Real Estate Crowdfunding: Crowdstreet
- Best for Diverse Range of Offerings: Yieldstreet
- Best for Real Estate Notes: Groundfloor
- Best for Accredited Investors: Propel(x)
- Best for Artwork: Masterworks
- Best for Wine: Vint
- Best for Gold: Vaulted
- Best for Fine Collectibles: Koia
Different financial advisors take different approaches to investing. But the piece of advice that nearly all of them give almost all of their clients is to diversify their portfolio. The logic behind this is simple. Even the best investments go through down cycles, which means putting all your investment eggs in 1 basket is inherently risky. Diversifying your portfolio minimizes the risk that all your investments go south at the same time. One of the best ways to diversify your portfolio is by making alternative investments.
The Best Alternative Investment Platforms
One of the miracles of the internet is how much smaller it has made the world of investing. Before the internet, if you wanted to make an alternative investment in wine or art, you’d have to have a wine cellar or warehouse to store it in. Then you’d have to arrange security and insurance for the investments. It would literally be a full-time job.
But thanks to the internet, there are now dozens of alternative investment platforms where you can pick and choose what to invest in while someone else does the heavy lifting. Some of Benzinga’s favorite alternative platforms are listed below.
Arrived Homes is one of the newest and fastest growing crowdfunding platforms on the internet. The company allows non-accredited investors to buy shares in carefully selected rental properties.
The minimum investment is only $100, making it easy to start earning passive income from real estate and to diversify across multiple properties. Investors simply collect quarterly dividends from their properties while waiting for the asset to increase in value over time. Arrived Homes takes care of finding tenants as well as all of the management
CrowdStreet is a real estate crowdfunding platform that offers investors the chance to purchase equity shares in various real estate investments around the country. It’s a great way to get involved in real estate, but you must be an accredited investor to buy into any CrowdStreet offerings. That means only investors who pass a certain net worth threshold are eligible.
If you are accredited, CrowdStreet offers some great investment opportunities with the potential for very high returns. The downside is that the minimum buy-ins are on the high side, and most CrowdStreet investments don’t pay dividends for several years.
Yieldstreet offers an all-in-one alternative investment platform with offerings for non-accredited investors as well as offerings available to accredited investors only. Yieldstreet regularly has new investment opportunities available, ranging from commercial real estate, art equity funds, structured notes, portfolios of consumer debt and many others.
Even if you're not quite ready to jump into one of Yieldstreet's offerings, it's worth signing up for the platform to gain access to the many webinars and educational content available to learn the ins and outs of various types of alternative investments.
Groundfloor is an alternative real estate investing platform that offers investments in high-yield, short-term real estate loans. The platform is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with an average of 50-70 investments available at any given time..
Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. The low minimum investment allows investors to easily diversify their Groundfloor portfolio across multiple loan offerings.
Propel(x) is a platform that’s designed for accredited investors and startups. If you’re an investor, you can enter the platform and pay a 2% platform fee to invest in a wide range of products, businesses and ideas. With a minimum investment of $10,000, you can easily budget and allocate your funds to companies you believe in.
If you wish to invest as part of a syndicate, your minimum investment is $5,000, making the platform even more accessible than it is for individuals. Syndicates pay a 7.5% platform fee, and you will pay a 10% exit fee when you move on from said investment.
Investments on Propel(x) are heavily curated, cover a wide range of industries and are always easy to access. You can even take advantage of concierge onboarding so that you get set up perfectly and can begin investing right away.
This alternative investment platform is based on fine art. It identifies select artists and buys works, which are then registered with the Securities and Exchange Commission (SEC) as a regulation A share offering. Investors will then share in the profits when the artwork they’ve invested in is sold.
Masterworks features works from famous artists both living and dead. In fact, it even has works by Banksy — the pseudonym of the England-based Street artist. This is, however, a long-term investment. Unlike investment real estate, there is no residual income generated by Masterworks investments, and investors must be willing to wait for several years before earning a dividend.
Anyone who has ever been to a fancy restaurant and ordered a bottle of wine knows it can be expensive. That’s because wine is produced in finite quantities, and fine wine is in high demand worldwide. That makes it a great alternative investment. Vint allows retail investors to benefit from the price increased caused by this high demand with its wine investment platform.
Vint has the buying power, industry connections and knowledge necessary to gain access to the most sought-after wines on the market at attractive prices before they reach peak value. The company also makes it possible for individual investors to gain access to these wines with a much smaller minimum investment than seeking these bottles out on their own.
Vaulted is a mobile app that allows you to buy and sell gold with your smartphone. It’s an all-in-one service that will also store your gold securely in the Royal Canadian Mint’s vault for a low annual maintenance fee. Vaulted offers some of the lowest transaction fees and highest level of transparency among online gold brokers.
Koia is an alternative investment platform that uses Web3 and blockchain technology to sell fractional shares of unique items. Because of this, it doesn’t lean into a singular niche. You can invest in or purchase fractions of a wide range of items that might include:
- Rare whiskies
- Pokemon and other trading cards
- Fine wines
- Fine jewelry and more
Everything on the platform is sourced and verified before it’s listed. Each item is stored safely, and all your fractional shares are minted to a specific item.
To buy, wait for an item to drop. When it drops, you can purchase up to 100 fractions using your preferred crypto wallet, and you can sell those fractions through an NFT marketplace or cash out when a buyout offer comes through.
Koia uses Polygon, which charges low gas fees. There are no maintenance fees, and you pay 1.5% to purchase your fractions and 2.5% when your fractions sell. If you don’t have a wallet, Koia will generate a non-custodial wallet for you, making this one of the simplest alternative investment platforms out there.
What is an Alternative Investment?
Any investment you make in something outside of stocks and bonds is considered an alternative investment. It may sound exotic but in reality, people have been making alternative investments for a long time. Historically, real estate and gold are 2 of the most popular alternative investments. You can diversify your portfolio by making alternative investments as supplements to your stocks and bonds, or you can have a portfolio that consists entirely of different alternative investments.
Types of Alternative Investments
As discussed in the section above, real estate and gold are 2 of the most commonly held alternative investments. With that said, there is a multitude of alternative investments you can make. Here are some of the most popular options:
- Real estate
- Precious metals (gold, silver, platinum)
- Cryptocurrencies like Bitcoin or Dogecoin
- Non-fungible tokens (NFTs)
- Collectibles such as baseball cards, historical items and rare jewelry
Alternative investments may sound like a fancy, New Age concept, but that’s far from the truth. In fact, if you own real estate, you have already made an alternative investment. Many people who see the wisdom of investing, but are put off by the volatility of the stock market, have been gravitating toward alternative investments for quite some time. With that said, it’s important to remember that there is an incredible variety of alternative investments outside of real estate or even gold. The rise of internet-based alternative investment platforms has opened up a whole new world to potential investors.
Now you can buy shares of startup companies, wine futures and even sports collectibles as alternative investments. Some have high payoffs and an elevated risk level, while others may require investor accreditation and the ability to wait a long time before earning a dividend.
Other alternative investments have an active secondary market that allows you to liquidate your shares quickly. The variety is nearly limitless. Alternative investments can be a great way to diversify your portfolio, but you still must consider the risks and choose wisely. As always, Benzinga is a great place to go for neutral information on all the pluses and minuses.
Frequently Asked Questions
Any investments made in something aside from stocks and bonds are considered to be alternative investments. Examples of popular alternative investments include the following: gold, real estate, wine, sports collectibles, startups, art, cryptocurrency.
The answer to that question depends on several factors, and the answer will vary depending on the needs of each investor. Long-term, accredited investors might like REITs, but there are also real estate offerings for nonaccredited investors as well.
Other investors may already have real estate holdings and want to buy into niche investments that pique their personal interests such as wine or sports collectibles. In all cases, investors have to consider their liquidity and individual risk tolerance before deciding what investment is best for them. What might be right for one, may not be right for another.
Accelerate Your Wealth
Arrived Homes allows retail investors to buy shares of individual rental properties for as little as $100. Arrived Homes acquires properties in some of the fastest-growing rental markets in the country, then sells shares to individual investors who simply collect passive income while waiting for the property to appreciate in value over 5 to 7 years. When the time is right, Arrived Homes sells the property so investors can cash in on the equity they've gained over time. Offerings are available to non-accredited investors. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today.