Investing in the stock market is not for the faint of heart. While there's plenty of money to be made, there are also periodic downturns and market corrections. It can be nerve-wracking -- and costly -- to watch portfolio balances plummet, whether investing for grandchildren or trying to make money while being socially responsible. Here are 12 (hopefully) less volatile investment alternatives suggested by financial experts.
Whether it's photographs, sculptures, paintings, or drawings, the art market is full of opportunity according to TopCashback personal finance expert Natasha Rachel Smith. "It's a safe and alternative way to invest without fearing your money will reflect the ups-and-downs of traditional stocks and bonds," says Smith, who suggests acquiring fine art that is already valuable. When investing in art, be sure the purchase is not damaged, and get the item insured, says Smith. The big bonus with this type of investment? It's possible to enjoy the beauty of the purchase while it grows in value.
Because gold and silver tend to hold value, both can be a wise, long-term investment. Gold can be purchased in the form of bullion, rare coins, and gold IRAs. One of the most popular ways to purchase silver is in silver stock, which invests in the companies doing the mining. It's also possible to purchase silver coins. When the U.S. dollar heads downward, gold and silver commodities increase in value, according to Michael Tamez of Sunshine Gold Investments. "Although gold may be too expensive as an investment option for most people, anyone can afford to invest in silver," says Tamez.
Investing in comic books is no joke. A few years ago a copy of Action Comics #1, which introduced Superman to the world, sold for a staggering $3.2 million on eBay. According to Vincent Zurzolo, co-founder of Metropolis Collectibles, comic book investing is becoming a hot trend thanks to top-grossing movies featuring comic book characters and the increasing popularity of events like Comic-Con. It's not just older books that are valuable. Even comics from the last 20 years are becoming collectible. "Some have jumped in value from just a few dollars each five years ago to $50 to $100 today," says Zurzolo.
While the 2008 crash in the real estate market made millions of people nervous, buying property remains among the soundest ways to secure a financial future. Consider getting into the Airbnb game by buying a property to rent out as a source of income. "Having a rental property can usually provide steady and reliable income until you're ready to sell it, especially in states where property tax is very low," says TopCashback's Natasha Rachel Smith.
Coins are one of the most concentrated forms of wealth, says Mike Fuljenz of Texas-based Universal Coin & Bullion. Over time, quality coins can grow in value faster than gold bullions. Rare coins also provide a hedge against currency devaluation, inflation, and even economic collapse, allowing owners to profit in nearly any kind of market. However, there are risks. "Prices can remain stable or even decline for awhile," says Fuljenz. When buying coins, find a reputable dealer such as a member of the Professional Numismatists Guild who must adhere to a strict code of ethics.
Yes, wine is a popular beverage -- but it's also a good investment. Vintage wine increases in value with age, says TopCashback's Natasha Rachel Smith. "You could make a steady return estimated between six and 15 percent annually over the long term," says Smith. Prices of certain vintages may fluctuate from year-to-year, so research to determine which wines are worth the investment.
There are plenty of stories about a single, valuable stamp netting its owner a handsome profit. With interest rates on traditional bank accounts currently being low, investors can often make more money on a rare stamp -- if they buy the right one. By some accounts, stamp collectors can earn between a five to 20 percent yield over time. This form of investment is not for novices, however. Pay attention to how scarce the stamp is, and buy stamps in good condition. Stamps do not translate into overnight profits, as they often need to be held between five to 15 years.
Peer-to-peer lending is an investment that requires as little as $25 to get started and benefits both the investor and the borrower. By eliminating banks from the equation, investors typically get a higher rate of return and borrowers incur fewer fees. It's also possible to diversify and minimize risk. Through platforms such as Lending Club it is possible to invest money in dozens, even hundreds, of loans. If one or two loans go south, all is not lost -- and the interest on successful loans is often high enough to cover any losses.
A CD ladder is a collection of certificates of deposit with staggered maturity dates. Held by banks and insured by the FDIC up to $250,000, CD ladders are certainly not a "get rich quick" approach but currently do provide a better yield than money market accounts. The key is to be aware that longer-term CDs pay higher rates, and having CDs that mature over several years means getting regular returns.
U.S. TREASURY SECURITIES
Those investing in treasury securities can choose among bills, notes, bonds, and Treasury Inflation-Protected Securities (TIPS). Each of these can be purchased directly through the Treasury with as little as $100. The drawback is a low rate of return. Bills offer fairly low interest rates, while bonds tend to pay more. Notes fall in the middle.
This option requires more money up-front than many other investments, but experts say it also represents one of the most significant capital appreciation possibilities out there -- when it works. Provide capital that allows an existing small business to expand, but instead of simply offering a loan become a silent owner. If the business ultimately does well, the investment will pay off in kind. Research before investing, though, as small businesses also have a significant rate of failure.
This approach may take a bit longer to pay off, but Natasha Rachel Smith of TopCashback says it's an option that shouldn't be overlooked. "Improve your income earning ability by working as hard as you can. Improve your productivity and job performance by taking a course or two to invest in your future," she says. "Acquiring certain certifications or skills can ultimately result in an increase in pay and promotions. Expand your knowledge and watch your investment grow with time."