Often, investors fail to realize that investment is not just about stock markets, and there are other resources that give the same returns or sometimes better returns than stock markets.

Alternative investment can also be referred to as an investment that is different from conventional investments. A conventional investor may invest in stocks, bonds, and cash.

There may be a lot of reasons for investors to consider an alternative investment.

Precious metals
Though investing in precious metals, especially, gold, is risky, investors believe that metals have more value when sold off. These precious metals have an advantage of stock as investors can take physical possession of the asset. In times of economic turmoil or financial meltdown, these precious metals are an investor’s best friends.

U.S. Treasury Securities
Treasury bills are one of the safest alternatives to conventional investments. These securities come in four types, namely, bills, notes, bonds, and securities. These securities can be bought from the U.S. Treasury portal and are available in the minimum denomination of $100. Although the interest rates on these instruments are low, they are the highest-rated debt securities in the world.

Crowdfunding
Many startup companies offer shares in exchange for investment in their company. This type of investment is referred to as equity crowdfunding. By investing in the company, you become a part owner of the company. There are many equity crowdfunding success stories, which make this type of alternative investment a success. The only downside of crowdfunding is that if the company fails to succeed, you will have to wash your hands off the investment.

Real estate
Investment in real estate is one of the most profitable alternative investments, and the chances of it going wrong are very low. There are so many ways of investing in real estate apart from buying and selling real estate. One does not necessarily have to buy real estate to invest in it. An investor can choose to partner with other like-minded investors to pool in some funds. Another route is to invest in REITs (Real Estate Investment Trusts). Through that route, you can invest money in any property of your choice that is managed by companies investing in properties. An investor can receive a dividend in return for the investment.

Peer-to-peer lending
A relatively new concept, peer-to-peer lending is about lending your money online to companies who in turn lend to different types of borrowers at a fixed interest rate. The finance companies reward the investors with interest rates that are better than those offered by banks and bonds. But one needs to have an appetite for risk. If the borrower fails to pay the company, it can affect your principal and interest.

Alternative investments are good for diverting your funds from the risks of stock markets, but you must be careful about get-rich-quick schemes that will swindle you. Nevertheless, always maintain a diverse portfolio of conventional and alternative investments.