3 Ways to Shift Your Investments Away From the Stock Market

In early February, it was reported that the S&P 500 information technology sector was up 14% after sliding 28% in 2022. A few days later, Goldman Sachs speculated that the stock market is, in effect, done for the rest of 2023. 

Everywhere you turn, the advice is different. What are investors to do when it comes to stocks? Even during the best of times, they’re nuanced, complicated, and require impeccable timing (something that is notoriously hard to master). Unless you’re a day trader with plenty of experience and a huge dose of luck, it’s hard to feel like you’re getting the most out of your stock market portfolio right now.

For the brave of heart who are fed up with stocks, here are a few alternative investment suggestions in the fractionalized, accessible, blockchain-based world of crypto to help you branch out a bit.

1. Build a Base of Cutting-Edge Real Estate Assets

Real estate is a classic portfolio builder. Investors of all kinds can access it, whether they’re flipping a home, buying a rental property, or setting up an Airbnb.

One area that has always been out of reach of smaller investors, though, is commercial real estate (CRE). Many commercial real estate investments tend to start in the tens of millions of dollars and go up from there. This means only the richest can invest in this valuable area with a reputation for steady value and sizeable returns.

Fortunately, the elite nature of the CRE market is coming to an end. Thanks to the endlessly exciting world of blockchain technology, high-level commercial properties are becoming accessible to literally anyone with a chunk of change they want to invest in real estate. 

Companies like RedSwan are tokenizing titles of multi-million dollar properties. In effect, this gives property owners the ability to crowdsource massive property investments. On the investor side of things, it lets an individual with as little as $1,000 buy partial ownership of a property. 

This isn’t the same as a stock market REIT, either. Investors don’t own part of a corporation that owns multiple properties. They’re buying fractionalized portions of the title of the properties themselves. It’s a wonderfully 21st-century way for ambitious investors with limited resources to stabilize their portfolios with tangible, real-world real estate tied to the blockchain.

2. Try NFTs …the Right Way

The NFT market has been a wild ride in the past year or so. Many projects dropped to virtually zero value in 2022. 

In fact, this prompted the team at CoinLedger to literally create “The NFT Loss Harvestooor.” (Yes, you read that right.) The tool buys failed NFTs for 0.00000001 Ethereum (equivalent to $0.000016 as of the time of this writing), freeing up investors in 2022 to write off their losses for tax breaks.

But no investor wants to stoop to these levels to make a buck on their taxes. They want soaring profits — and there’s still a chance to do that with NFTs if you back the right project. The trick is finding projects that have a few combinations of key factors in place:

• They have a clear roadmap: You don’t want to buy an NFT from an artist doodling with no plan in mind. Look for whitepapers that clearly explain the plan for each NFT project.
• They have a community: Community is everything in the crypto world. If a large group of investors backs a project, it has a better chance of succeeding.
• They aren’t overpriced: This one’s tough to gauge. But if a project is on fire, be careful not to buy in at the wrong time. Look for opportunities to jump into healthy projects with reasonable current prices and a promising future.
• They offer rewards: If you can turn an NFT into a wealth generator through staking or airdrops, it can create a passive form of income, even as you wait for the actual art to appreciate in value.

NFTs are one of the highest-risk investments you can find these days. Nevertheless, if you do your homework, you can still turn a profit. And it’s yet another way to diversify that portfolio with some unique assets.

3. Look for a Good ICO

The crypto market is popular enough, at this point, that it’s hard to expect the meteoric returns of a few years ago. However, one area where this potential still remains high is with initial coin offerings or ICOs.

The problem is, as is the case with NFTs, the risks associated with ICOs can be significant. There are many projects that gain momentum only to turn into scams and rug pulls. 

So, before we go any further, let’s reiterate the adage that you should never invest money that you can’t afford to lose. With that said, even highfalutin investment companies like Motley Fool consider ICOs a viable option, especially for those looking to find alternative ways to invest in the blockchain.

Researching ICOs is a good way to find and invest in new coins from the ground floor. In these cases, a few thousand or even a few hundred dollars (equal to a single share of stock for many companies) has the potential to turn into tens of thousands of dollars if a coin takes off.

Once again, prudence and research are key here. Do your homework. Read whitepapers. Study up on teams and their past histories. Another helpful tip is to look for projects tethered to real-world value, like the real estate option outlined above.

Whether it’s tokenized commercial real estate, healthy NFT projects, or ICOs, there are plenty of ways to shift investments away from the stock market without piling it all into BTC. Use the tips above to jumpstart your 2023 investing strategy so that you can take advantage of the best opportunities that come your way in the months ahead.

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Updated: 30 Jun 2023, 04:10 PM IST