10 Reasonably Safe Alternative Investments - What To Know

In recent years, it has become increasingly popular to invest your money in alternative investments. Traditional investment routes have almost become a thing of the past, as more and more people are attracted to alternative investments due to their increased reward and, in some cases, reduced risk. 

But, when it comes to alternative investments, it can be difficult to know where to start. These investment routes are “alternative” for a reason, and that is because they are not as mainstream as traditional investment routes. So, if you are thinking of going down an alternative investment route, you will probably want to do your own research. 

In this guide, we’re giving you an overview of 10 reasonably safe alternative investments. So if you want to find out more, keep on reading!

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1. High-Yield Savings Accounts

First up, we have high-yield savings accounts. These are some of the safest alternative investment routes, and that is because they are relatively stress-free and straightforward to use.

A high-yield savings account is basically just a savings account that has a high APY. So, any money that is stored in this account will increase in value due to this high APY. There is very little risk associated with a high-yield savings account which is why they are so popular. With some banks offering upward of 4% APY, it is clear to see why this investment route is so popular. 

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2. Venture Capital

Another great investment route to consider is venture capital. Venture capital is a type of private equity that is provided to start-ups and small businesses by investors. The idea of venture capital is that it is a long term investment, and over time it will really help the company grow. 

If you have the cash, then you could use venture capital to invest long-term in a small business or start up. Further down the line, it is likely that you will get an excellent return on your investment, and almost certain that you will get more money out than you put in. 

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3. Short-term Certificates of Deposit

In contrast to venture capital which is a relatively long-term investment route, short-term certificates of deposit are, as the name suggests, a short-term investment route. Typically, when you invest money in a short-term certificate of deposit, your money will be invested for around 6 months before you receive a pay-out. 

Short-term certificates of deposit are an incredibly popular route of investment. They can give you a reasonable profit, while also providing you with a lot of security. When you invest the money, you know exactly how long the cash will be invested for before a pay-out because the terms will be outlined on the certificate of deposit. 

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4. Financial Derivatives

Derivatives are a form of financial contract, and they are becoming an increasingly popular form of alternative investment. With financial derivatives, the contract is set between two or more people, and you are able to make profit on the value of the underlying asset. 

The value of the contract is derived from the underlying asset. So, as the value of the asset changes, so will the value of the financial derivative, and the profit that you make. 
 

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5. Dividend-Paying Stocks

Stocks and shares are a fairly traditional form of investment. But dividend-paying stocks are more of an alternative investment. Dividend-paying stocks are stocks which you can invest in that will pay you a dividend for your investment. 

Essentially with these stocks, the profits that the company makes will be divided between the investors. Allowing you to generate a decent profit on your initial investment, while also retaining your stocks. 

6. Hedge Funds

Again, hedge funds are an alternative investment, but they are a little more traditional than some of the others on this list. Hedge funds are funds generated by a group of private investors where the money is managed by a professional fund manager.

Many people choose to invest in hedge funds because it is a great way to diversify your portfolio. Plus, it is a reasonably safe investment as a professional will manage the fund at all times. 

7. Fixed Annuities

Depending on when you want to invest your money, a fixed annuity could be the right investment for you. In particular, this form of investment is great if you want a reliable source of income for investment. 

This investment route isn’t the most lucrative, but it is pretty safe, and it can allow you to generate a fairly decent return on your investment. They aren’t high interest, but you will still make a decent amount of money on your investment which is what makes this investment route so popular. 

8. Commodities 

Trading commodities is an alternative investment route that is becoming increasingly popular. Commodities are raw materials that are used to create products, and it is possible to invest in these raw materials to make money. 

When you trade commodities, you enter a market for buying, selling, and trading these commodities. It can be a little confusing at first, but it is an excellent alternative investment route.

9. Corporate Bonds

Bonds are issued by corporations as a way to raise funding, and you can purchase bonds as a form of investment. When you purchase corporate bonds, you are essentially investing in that company as you are lending money which will be repaid in the future. 

Further down the line, the company will then re-pay you the money that they borrowed, plus extra. They can be a reliable source of income to add to your investment portfolio, and they are a relatively low risk too. These factors combined make them a very good investment opportunity. 

10. Real Estate

Finally, let’s wrap this up with real estate. Real estate investing is always considered to be a reasonably safe investment opportunity, and that is because property is a constant. Generally, investment in property will always allow you to break even, and most of the time you will be able to generate a lot of profit. 

There are lots of different ways that you can invest in real estate, whether that be through a rental portfolio, flipping houses, or lots more. No matter what you choose, property will always be a reasonably safe alternative investment. 

Summary

In short, there are lots of alternative investment routes that are reasonably safe. In this guide, we have taken a look at 10 of the best reasonably safe alternative investments. 

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Thanks for reading!