Investing is no longer limited to just stocks and bonds. With the rise of innovative investment apps, it's easier than ever to explore alternative investment options and build a diversified portfolio that fits your financial goals and risk tolerance. In this blog post, we'll explore how to use investment apps to expand your portfolio beyond traditional investments, giving you access to a wide range of opportunities from real estate to cryptocurrency.
Why Diversify Beyond Stocks and Bonds?
Diversification is key to reducing risk and enhancing potential returns. While stocks and bonds are essential building blocks of a portfolio, they may not always offer the best returns during certain market conditions. By diversifying into alternative assets, you can take advantage of opportunities that aren't tied directly to the performance of the stock market, providing stability and growth potential during market downturns.
Alternative investments also help you manage risk by reducing your exposure to any single asset class. Let's take a look at some of the best investment apps that allow you to diversify your portfolio beyond stocks and bonds.
1. Real Estate Investment Apps
Real estate has long been a popular alternative investment, providing steady income and long-term appreciation. However, traditionally, investing in real estate required large sums of money and a lot of time. Now, with real estate investment apps, you can invest in real estate with as little as $500.
Popular Apps for Real Estate Investments:
- Fundrise : Fundrise allows you to invest in private real estate projects, such as commercial and residential properties. The app offers various investment plans based on your risk tolerance and financial goals.
- RealtyMogul : RealtyMogul provides both individual and diversified real estate investment opportunities. You can invest in commercial and residential properties, as well as real estate investment trusts (REITs).
- Roofstock : Roofstock focuses on single-family rental properties. The platform allows you to buy fully managed rental homes and collect rental income.
These apps give you the ability to invest in real estate without the need to buy physical property, making it more accessible for everyone.
2. Cryptocurrency Investment Apps
Cryptocurrencies have become one of the most popular alternative investments in recent years. While they come with high volatility and risk, they also offer the potential for massive returns. Cryptocurrency apps allow you to invest in Bitcoin, Ethereum, and a variety of other digital currencies.
Popular Apps for Cryptocurrency Investments:
- Coinbase : Coinbase is one of the most user-friendly apps for buying, selling, and storing cryptocurrencies. It supports a wide range of digital currencies and provides a secure platform for investors.
- Binance : Binance offers advanced trading features, low fees, and access to a vast range of cryptocurrencies. It's a great app for both beginners and seasoned traders.
- Kraken : Known for its strong security features, Kraken allows users to trade a wide array of cryptocurrencies. It's also highly regarded for its educational content, making it ideal for beginner investors.
While cryptocurrencies can offer high returns, it's important to understand the risks and ensure you only invest what you're willing to lose.
3. Peer-to-Peer (P2P) Lending Apps
Peer-to-peer lending is a form of investing where you lend money to individuals or small businesses in exchange for interest payments. This type of investment can offer high returns, but it also comes with a higher level of risk. P2P lending apps allow you to choose loans based on risk levels, providing you with control over your investments.
Popular Apps for Peer-to-Peer Lending:
- LendingClub : LendingClub allows you to lend money to individuals or small businesses, with the potential for high returns. The platform assesses the risk of each borrower and offers investments based on credit scores.
- Prosper : Prosper is another P2P lending platform that lets you invest in personal loans. The app provides a variety of options, allowing you to choose the level of risk you're comfortable with.
P2P lending can provide you with steady cash flow through interest payments, but be aware that defaults can occur, so diversification is key.
4. Commodities and Precious Metals Apps
Commodities like gold, silver, and oil are often seen as safe-haven investments that perform well during times of market volatility. Precious metals, especially gold, have historically been a popular choice for diversifying a portfolio. Investing in commodities has traditionally been expensive and complicated, but now there are apps that allow you to invest in them easily.
Popular Apps for Commodities Investments:
- Acorns : Acorns rounds up your spare change and automatically invests it in diversified portfolios. Among the portfolio options, it includes a commodities fund that invests in gold and silver.
- BullionVault : BullionVault allows you to buy, sell, and store physical gold, silver, and platinum in secure vaults around the world.
- eToro : eToro offers trading in commodities like gold, silver, and oil. The app is popular for its social trading features, allowing you to follow and copy the strategies of successful investors.
Commodities can be a great way to hedge against inflation and economic instability, and apps like these make it easy to add them to your portfolio.
5. Art and Collectibles Investment Apps
Art and collectibles have long been considered valuable alternative investments. These types of assets are generally less correlated with the stock market, making them an appealing choice for diversification. Art investment apps allow you to invest in pieces of fine art or collectibles, enabling you to own a fraction of a valuable asset.
Popular Apps for Art Investments:
- Masterworks : Masterworks allows you to invest in shares of high-value artwork from artists like Picasso, Warhol, and Banksy. The platform handles all aspects of buying, storing, and selling the artwork, making it easy for investors.
- Rally Rd. : Rally Rd. allows you to invest in collectible cars, watches, and other valuable items. The app lets you buy shares of rare items, so you can own a piece of luxury without needing to invest millions.
Art and collectibles are a great way to diversify into tangible assets, and these apps offer easy access to this market.
6. Impact Investing Apps
Impact investing involves investing in companies or funds that have a positive social or environmental impact. These investments can offer both financial returns and the satisfaction of supporting causes you believe in. Several apps cater to impact investors, helping them create portfolios that align with their values.
Popular Apps for Impact Investing:
- OpenInvest : OpenInvest lets you create a socially responsible portfolio that invests in companies with positive environmental and social impacts. The app offers customization to align with your values.
- Clover : Clover allows you to invest in funds that focus on sustainability and other socially responsible goals. The platform lets you build a portfolio that supports causes like clean energy and education.
Impact investing is an excellent way to make a positive difference while growing your wealth.
Final Thoughts
Expanding your portfolio beyond stocks and bonds is a great way to reduce risk and take advantage of new investment opportunities. Thanks to investment apps, it's easier than ever to diversify into real estate, cryptocurrency, peer-to-peer lending, commodities, art, and impact investments. By leveraging these apps, you can build a robust portfolio that aligns with your financial goals and risk tolerance.
Remember, before investing in any alternative asset, be sure to research the market, understand the risks, and choose a strategy that fits your overall financial plan. Happy investing!