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The volatility and fluctuation of the stock market is well known and well documented. However, many investors only invest in stocks, mutual funds, or exchange-traded funds (ETFs), which can make down-periods of the market a little stressful.
If you only invest in assets impacted by the stock market – what are referred to as “traditional” investments – you may seek diversification or the opportunity for more control.
Diversification is especially important when your retirement account and future can be negatively impacted by a market downturn.
If you are an investor asking, “What should I invest in outside of the stock market?” here are a few “alternative” assets to consider. Alternative assets typically don’t correlate to the stock market and can help add diversification to your portfolio.
5 Alternative Assets Outside of the Stock Market
1. Real estate
There are a variety of different real estate investment strategies, but the following are some examples:
- Rental properties
- Real estate partnerships
- Flipping houses
- Mobile homes
- Raw land
- Vacation homes
- Assisted living facilities
2. Precious metals
Investing in precious metals such as gold or silver can be an option for investors looking for assets outside of the stock market. To learn more about the specifics of investing in precious metals with your retirement account, please read IRC § 408(m).
3. Private debt
Some examples of private debt, also known as promissory notes, include:
- Private lending
- Hard-money lending
- Mortgage notes
- Corporate debt
- Trust deeds
4. Private equity
Private equity, or private entity, investing may involve purchasing ownership, or part ownership, in a start-up company. Private equity is considered an alternative investment outside of the stock market. Other examples include:
- Real estate development companies
- Private LLCs
- Private placements
- Other corporations
Investors may find cryptocurrency to be a diversification strategy for their portfolio. Some types of cryptocurrency include:
It’s possible to invest in these assets, as well as many others, with your retirement account if it’s “self-directed.”
With a self-directed account at Equity Trust Company, you have the opportunity to invest in alternative assets such as real estate, precious metals, private equity, and more in your tax-advantaged account. Additionally, you can invest in traditional assets such as stocks and mutual funds – all through a single custodian.
Where to find a potential alternative investment
If you haven’t yet located an investment for your self-directed account, no problem. Equity Trust’s Investment District online marketplace connects you to investment providers in various asset classes, making it easy to find an opportunity that suits you. Get started now.
Interesting in finding out more?
Access our complimentary 15-Minute Guide to taking control and diversifying beyond the stock market.