4 Ways To Invest Outside Of Stock Markets
Stock markets are confusing to many modern investors, because they’re simply not intuitive in the early going. There’s a fairly steep learning curve, the transactions can come with hefty fees, and the overall experience can be somewhat intimidating. Furthermore, major stock markets are also hard to trust these days for people who may have lost money in financial crashes, or for millennials who grew up hearing about shady activity on Wall Street.
The point of this piece is not to suggest that stock markets shouldn’t still be considered. Many would argue that they still make for the most strategic investment opportunities, and it’s at least worthwhile to take the time to look into all your options. Fortunately though, there are also more and more modern alternatives that people can explore for investment outside the stock market altogether. Below are four particularly interesting ideas to keep in mind.
1. Cryptocurrency Investment
Digital currencies have gained popularity largely because they’re decentralized, meaning no government organization or bank oversees or controls them. Newly mined cryptocurrency is authenticated through complex processes, and thereafter values are determined purely by the market. This fosters a sense of trust between crypto traders and the assets themselves (such as bitcoin, ethereum, and ripple, to name a few). And as these assets have become better known, more and more people are getting curious about investing. It’s a tricky market to predict, which means there is certainly some risk of loss. But MPmania has posted a helpful guide in the past that can give you some of the answers you need if you’re interested in getting started with this new, alternative investment.
2. Forex Trading
Forex trading, or the buying and selling of currency pairs against one another, is becoming easier and more accessible, and is thus becoming a more viable modern alternative to the stock market. One thing that people particularly like about this option is that the massive size and worldwide nature of the forex market mean that most any transaction can be made at any time. Per an FXCM overview for South African traders (but applicable internationally), the forex market is the largest, most liquid market in the world. This doesn’t mean that trading is easy by any means. There are many different strategies involved and there’s something of a learning curve. But all in all it’s still simpler than the stock market, and its convenience is tough to match.
3. Buying Into Small Businesses
Investing in entrepreneurial pursuits used to be an activity for the wealthy as well, but it’s no longer so exclusive. Today, average people and young investors with limited assets can invest in startups without needing much capital. The Balance has pointed to companies like WeFunder and SeedInvest, among others, that allow for minimum deposits of about $100 through which investors can buy into budding businesses right away. Even better, these platforms pre-screen the businesses available to buy into, so that you can easily access information about an individual venture’s values, goals, and general function. This essentially cuts out countless hours of research that can be involved in more conventional venture capital pursuits, streamlining the process and allowing people to simply pick businesses they believe can succeed. From there it’s just a matter of chipping in and – hopefully – reaping the rewards if the business succeeds.
4. Peer-to-Peer Lending
Lending has long been a viable option for entrepreneurs and people who need to borrow money, but modern peer-to-peer opportunities are turning the concept into a relatively popular way for people to invest their funds. Rather than having to rely on big banks for complicated (and high-interest) loans, borrowers can now sign up with platforms like Lending Club, Peerform, and Prosper in the hopes of getting an injection of capital for their pursuits. As an investor, meanwhile, you can provide that capital (with various levels of risk typically offered), in the hopes that you’ll gain more back in return over time. There’s some risk in peer-to-peer lending, but it’s yet another alternative form of investment that’s become quite accessible online.
No matter how you invest, if you choose to do so, the most important thing is to be responsible and do your research. Whether through the stock market or one of these alternatives, it’s important to go in with a strategic approach and sound reasoning. With that said though, the options listed above can be interesting to look into if you’re not one to trust ordinary markets.