If you favor stocks in your portfolio, you’re not alone. They’re the second-most preferred type of investment behind retirement accounts, which themselves held 79% of plan contributions in equities last year, according to Vanguard’s “How America Saves 2025” study.
There are other options, though, to invest without buying stocks. In fact, diversifying your portfolio with reliable alternatives can help reduce your overall risk.
Here are five to consider as investments beyond the stock market.
5 Top Investments Outside the Stock Market
Do you fear investing in assets other than stocks? There are several alternatives to stock investing that could fit your goals, financial situation and risk tolerance. Here are the top 5 ways you can invest without buying stocks.
1. Real Estate Investments
Historically, real estate has been a foundational investment to build wealth because it can provide steady cash flow and hedge against inflation. When the prices of consumer goods rise, rents typically increase too.
You can buy residential or commercial investment properties directly. For residential, think single-family homes that you can rent short or long term, or a duplex or triplex to rent long term. Commercial properties could include an apartment complex, office building or shopping center.
Either approach could deliver passive income from rent revenue as well as appreciation.
More budget-friendly approaches to real estate investing include buying shares of a real estate investment trust (REIT) or joining others to buy shares of a property.
A REIT is a company that owns and operates residential and commercial properties that generate income. It functions much like a stock, and you get paid a dividend periodically without having to worry about hands-on property management.
Through a fractional real estate investing platform, you can join multiple buyers in owning an equal portion of a property, contributing proportionally to property management and earning rental income and appreciation.
2. Bonds and Fixed Income
Bonds and other fixed-income products can generate stable and predictable income through scheduled interest payments and a return of your principal, appealing to conservative investors, retirees, and those who prioritize income generation and capital preservation over growth.
Fixed-income investments can include government bonds, corporate bonds, municipal bonds and certificates of deposit (CDs).
Companies and governments issue bonds as a promise to repay money they borrow to pay for projects and activities. You can receive a set interest payment for a defined period with the promise of returning the principal at maturity.
The U.S. Treasury issues bills, notes and bonds backed by the federal government. Local and state governments issue bonds to pay for things like roads and water systems. Corporations sell bonds to pay for operations, such as capital projects.
CDs are time deposits with banks or credit unions that pay a fixed rate of interest for a specified term, typically a few months to several years. You agree not to touch the money for the term in exchange for a guaranteed return at maturity.
3. Alternative Investments (Private Equity, Hedge Funds, Commodities)
In search of ways to build wealth without stocks, many investors (especially millennials and Gen Z) are skeptical that traditional markets can produce high returns or align with their values, so they’re turning to alternatives.
An alternative investment isn’t an asset class. It’s a wide-ranging grouping of assets that aren’t stocks, bonds, cash or cash equivalents. That grouping includes hedge funds, private equity, venture capital, real estate, commodities, cryptocurrency, art and collectibles.
Once considered available only to high-net-worth individuals and institutions, alternative investments typically present a higher barrier to entry, requiring more capital. However, online platforms that allow fractional investing have opened some alternative investments to investors with less money.
While alternative investments generally come with higher risks, they also have the potential for high returns — with the added benefit of diversifying your portfolio.
4. Peer-to-Peer Lending and Private Credit
Peer-to-peer leading platforms and private credit funds allow you to loan money to individuals or businesses. In return, you can get higher interest, often 8% to 10%, than is typically paid on a bond.
Online platforms for peer-to-peer lending allow you to vet potential borrowers, helping to lower your risk on the unsecured loan. Private credit (loans made by non-bank lenders) often secures loans against real assets or collateral.
Peer-to-peer lending is unregulated, so you bear all the risk if a borrower defaults. With private credit, you face potential illiquidity if you need to access your money quickly.
5. Startups and Crowdfunding
When you invest without buying stocks, you can feed your sense of entrepreneurship and help others realize their dreams.
Equity crowdfunding and angel investing are two ways you can back a startup or early-stage company. In each case, you exchange your capital for an equity stake. However, these methods differ in scale and investor type.
Equity crowdfunding uses an online platform to pool small contributions — as little as $100 in some cases — from many investors, while angel investing typically involves a high-net-worth individual directly financing a startup.
The benefit is the high potential upside. If the company takes off, your worth grows. But funding a startup is also high risk. Around 90% of startups fail, with 10% going under in their first year.
You can use online platforms such as Wefunder, StartEngine, Republic and Fundable for equity crowdfunding, and startups can connect with angel investors at AngelList, Gust and SeedInvest.
Building Wealth Beyond Stocks
More than half of private-sector workers invest in retirement savings accounts tilted largely toward investing in equities, and many investors prefer putting their money in the stock market.
However, you don’t need to follow the crowd and limit your investing. By focusing on stocks and funds based on stocks, you could be missing out on the power of investing to boost wealth creation, outpace inflation, prepare for retirement and move toward your financial goals.
Now that you know how to invest without stocks, you may be able to reap the potential benefits of diversification, passive income and long-term growth that can come from adding multiple asset classes to your investment mix.
Frequently Asked Questions
What are the safest ways to invest without stocks?
All investments carry some level of risk, but there are several low-risk investments you can consider based on your financial goals, risk tolerance and investment horizon. The range of low-risk investments includes high-yield savings accounts, certificates of deposit, U.S. Treasury bonds, money market funds, corporate and municipal bonds, real estate and fixed annuities.
Can real estate replace stocks in my portfolio?
Financial professionals argue that it’s not an either-or decision between real estate and stocks since both can serve different roles in your investment portfolio and are proven to build wealth. Consider your financial situation, risk tolerance and investment goals, then decide the allocation of each to include in your portfolio.
Are alternative investments riskier than stocks?
Alternative investments — real estate, commodities, collectibles, cryptocurrency and private equity — are generally riskier than stocks because they often have lower liquidity, less transparency, higher fees and greater complexity. However, alternative assets typically have the potential to generate higher returns.
About Sarah Edwards
Sarah Edwards is a finance writer passionate about helping people learn more about what’s needed to achieve their financial goals. She has nearly a decade of writing experience focused on budgeting, investment strategies, retirement and industry trends. Her work has been published on NerdWallet and FinImpact.
