4 Alternative Investments for Individuals and Families

Diversifying an investment portfolio to include investment types apart from stocks and bonds can help you maximize your returns. Speaking to financial planning services can help you determine which investments are right for you for short- or long-term goals. Here are four alternative investments for individuals and families:

Real Estate

If you want to expand your portfolio with tangible assets, real estate investments are a suitable option. Invest in residential properties, commercial real estate, or real estate investment trusts. For residential properties, you may choose high-end homes, vacation rentals, and multi-family units among others. Investing in commercial properties like office buildings, retail spaces, and warehouses can also generate income.

Real estate investment trusts may include many property types and locations, helping reduce the possibility of risk. Investors often benefit from deductions for mortgage interest, property depreciation, and maintenance expenses. With these tax advantages, you can reduce taxable income and increase your profits.

Private Equity

With private equity, individuals and families invest directly in private companies or acquire public companies to make them private. This form of investment exposes you to innovative startups, niche industries, or markets that are not accessible through public equities. Some investors make growth capital investments, providing capital to established companies looking to expand or enter new markets in exchange for an equity stake.

Buyouts are a type of private equity that entails acquiring controlling interest or entire ownership of a company using leveraged financing. Distressed investments are the acquisition of a struggling business and improving operations to gain profit. You can also select venture capital, which is a form of private equity that focuses on startups and early-stage organizations.

Hedge Funds

In a hedge fund, you pool your money and allow a team of managers to invest it. Qualified financial planning services may work with you to invest the money in stocks, bonds, or other assets. Throughout the process, hedge fund managers make decisions and adjust investments based on current market conditions. Businesses may use borrowed money to make larger investments or use future contracts to help maximize profit.

Hedge funds use different methods to make money, such as investing in companies going through big changes like mergers or bankruptcies. Another common strategy is long-short equity where specialists recommend that you buy undervalued stocks and sell overpriced ones. Managers may also invest your money based on changes in the values of currencies, economies, or government policies.

Impact Investments

Impact investing is a way for individuals and families to generate an income while supporting what they care about. One strategy available to you is focusing on green energy funds, which invest in projects specific to renewable energy,y such as wind and solar. This type of investment helps reduce too much dependence on fossil fuels and protects the environment.

You may also pre-finance environmentally friendly and socially sensitive companies through what is called socially responsible funds. Some of these companies support equity for women or people of color and use eco-friendly materials to shield nature. Impact investments may offer tax incentives, so you can take advantage of the deductions and yield good returns.

Book an Appointment for Financial Planning Services

Depending on your short- or long-term financial goals and the type of investment you want to make, advisors can help guide your decisions based on the possible risks and returns. Experts monitor market conditions to help you invest wisely and increase your profits. Financial advisors can also assist you with navigating tax laws, including maximizing deductions and securing money in tax-exempt trusts. Call a trusted financial planning company today to book an appointment to learn more about alternative investments.