7 Powerful Alternative Investment Strategies for 2021
Knowledge of proven alternative investment strategies are an absolute essential for every investor to be mindful of. Especially in the aftermath of whatever is going to be left behind in this Covid-driven mad world. In this article, I outline 7 solid alternative investment strategies that anyone can use to grow their investment portfolio and take advantage of opportunities that are not directly related to property ownership.
For most investors (around 95%), the word investment begins and ends with the notion of property ownership. They think that buying and holding a property is the only way one can invest and for the most part, their minds don’t go beyond the realm of property to consider other asset classes that are equally, if not better performing (long term) in terms of returns.
Within that 95% group are those that look at rental investment properties as an alternative to buying and holding a property, but the end game is still long term ownership of the asset with a view of getting capital gains over time.
Nothing is wrong with either of those ideas. However, in an environment where uncertainty and the madness of political posturing is making clear cut decision making difficult, if you’re not open to alternative investment strategies, then you’re likely to fall into two camps.
Those that sit on the sidelines and wait for the dust to settle.
Those that continue to surge forward with what they know (buy and hold properties) and end up making crucial mistakes that will come back to haunt you 5 years down the line.
I’ve written ad nauseam about the perils of buying properties in a market such as the one we are seeing right now. Two weeks ago, I wrote about ABC’s breaking story about how the Reserve Bank of Australia tried to control the narrative around the economic crisis and instructed private companies to stop producing housing market data.
Not just Australia, this sort of thing goes on everywhere. The Aussies just got caught. But it’s not a major concern because mainstream media didn’t really report this story that much.
So let’s talk about some of the alternative investment strategies I want to bring onto your radar for the rest of the year and well into 2021.
Needless to say, these digital assets are an absolute no-brainer in times of a crisis. Many of you may not know the ins and outs of how crypto currencies work, but you don’t actually need to know how something works, in order to make money from that “something”.
In its most crude form, crypto currencies are basically a “store of value” based transactional token. Prior to 1971, when Mr. Nixon took away the gold standard, the notes of currencies you have in your wallet was backed by real physical gold.
You could technically go up to the bank and ask them to swap you $100 bill for equivalent amount in gold. Besides the fact that no one actually did that, the store of value principle there was driven by the fact that the value behind that note comes from proportionate amount of gold sitting somewhere.
In today’s economic system, there is nothing backing that note in your wallet except a promise by the government to pay you. It’s like an “I Owe You” from the government within nothing backing it.
A crypto currency such as bitcoin is a store of value based currency.
It meets the three primary criterion for a currency to be considered a store of value. These are:
Fungibility: In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part. For example: A gold bar is highly fungible. Because each bit of that gold bar, is still gold and is indistinguishable from the rest of the gold bar.
Durability: It must be something that can stand the test of time. Another reason why gold and silver were used back in the day as currency. Look around, Gold and Silver still exist.
Scarcity: It must be scarce or have a finite supply in order for the value to keep growing over time as more and more of it makes its way into circulation. For instance, there’s a finite amount of gold in the mines (both dug up and yet to be dug up). Hence, over time, the value of gold has been increasing due to the fact that it is getting scarce over time.
There are a few other principles around money, but for now, we will stick to these 3. So if you take bitcoin as an example, it meets all three of these criterion. Add to that the fact that bitcoin transactions are considered anonymous (I use the word considered because in today’s technocratic society, nothing is anonymous) and hence is very popular in underground circles.
Needless to say, when you have growing concerns about trust in the government and how “big-brother-like” the world has become in the last decade, it makes sense that if a transactional mechanism existed, that it would be adopted by lots of people. That’s exactly the story of Bitcoin.
We are currently in the middle of producing a course for its students to help them understand the ins and outs of bitcoin with the real practical applications of cryptocurrencies from an alternative investment strategy point of view.
You can pop your name and email here if you would like to be invited for the early-bird access to the course. We are currently working on a tight schedule to have the course ready just before the US elections.
So the simplest strategy with cryptocurrencies would be to buy and hold them and then as the market rises, you can decide whether you wish to liquidate them or keep holding onto them for even longer.
There are several economic commentators that believe Bitcoin will go past $100,000 in the next 5-10 years. I find some truth in there about the surge in value, but I’m not sure if I’d subscribe to the $100,000 figure.
Right now, at the time of writing this, Bitcoin is trading around the $10,400 mark. Can it go past $20,000? Yes. It has done that once before in 2017. Can it go past $50,000 – its entirely possible because bitcoin is very scarce by nature and as the global post-pandemic narrative goes from the frying pan to the fire, there’s a strong business case for more and more transactions to become bitcoin enabled.
2. Precious Metals
By precious metals, I mean gold, silver and platinum. There are other rare earth metals and minerals that have very strong trading value, but I am not including them in this article. They are part of our Precious Metals course, which is also being developed right now as an alternative investment strategy for our students.
Needless to say, Gold is the obvious safe haven asset class for most smart investors in the best of times. And in times such as now, Gold is an even stronger candidate for parking some of your cash. If you have cash, what are you planning on doing with it? Leave it in the bank for 1.5% interest? Or worse yet, run the risk of losing that money in the event a bank bail-in takes place?
Remember, in Australia the government only insures up to $250,000 in cash and in New Zealand, that amount is $0.
If you don’t know what the bank bail in is about, make sure you watch this video we produced a few months ago and read this article (I wrote in 2019) about the potential surge in value of gold.
3. Real Estate Investment Trusts
While most people may never have the financial capacity to build and own malls, hotels or office blocks, they can still participate in the returns from these extremely valuable commercial properties through Real Estate Investment Trusts.
The end game of any real estate investor is to generate passive income from the assets. OR at least, that’s what the end goal should be. Capital gains should always be the cherry on the top. Not the whole cake itself. The cake is, and shall always be, the passive income a property can generate.
Commercial properties obviously generate really sizeable cashflow income for the owners and in case of Real Estate Investment Trusts, most of that cashflow income is distributed to its shareholders as dividends. The best part is, as an investor, you’re not responsible for carrying any of the debt or having any of the headaches of managing commercial tenants. You don’t participate in any of the upfront pain, but get to partake in the returns.
Its a no-brainer really. Download the free Real Estate Investment Trust handbook that I put together a few weeks ago and you might also want to come over to one of our online webinars where I show you exactly how to make money from these amazing gems.
Its no wonder that our society is becoming more and more tech driven. In most developed (as well as some developing) nations around the world, algorithms already drive key decisions, both in the public as well as private sector.
Analysing driver behaviour through CCTV footage for issuing speeding fines as opposed to issuing a fine, just because John went over the limit at this one intersection, to using algorithms to determining whether or not a patient will survive a surgical event – algorithms are driving decision making in our society that is not yet fully understood by the masses.
Having been an algorithmic trader (meaning, I taught machines how to trade for me) for years, I am very familiar with the dependency financial markets have on these machine learning algorithms. So as tech becomes more and more advanced, companies listed on the stock exchanges that are participating at the leading edge of technology are ones to surely watch out for.
Computer Vision, Free Energy and Sonic Levitation, Advanced Genetics & Nanotechnology, Defence Technology, Surveillance & Civic Tech, Spacetech as well as Communications tech are all strong candidates to see exponential growth in the coming years.
Of these, I would like to expand on 3 that are very near and dear to me, because I have some experience working in those fields and have a lot of respect for anyone that has been able to crack the code on those.
One of the challenges with AI is that it is very good at reading and deciphering text but it is still not very good with deciphering and understanding images. As AI becomes more and more advanced and part of our lives, computer vision technology is likely to be the single driving force for taking AI out of the labs and into the hands of everyday people.
Well this is something that has been in the works for nearly 8 decades. Regardless of which side of the fence you sit on (in terms of whether or not the oil oligarchs will ever let truly free energy be made available to anyone), there’s real scope in this field and I have come across 2 patents recently that claim to have cracked it. Free energy, as the name suggests is using Tesla’s notes to replicate his Colorado experiment where he basically powered an entire town using nothing but air, which is free – hence the moniker “Free Energy”.
A recent patent filed claims to have developed a tractor beam that uses concentrated sound to lift and transport objects from one place to another. I have actually seen a demonstration of this technology with my own two eyes, so I can say with utmost confidence that this is not science fiction. It is real. Right now, the technology is in very early stages of development and the size and weight of the objects that have been successfully transported across a distance is very small. However, sky is the limit for this technology because if the weight and volume of transportable objects increases over time, that would make cranes and heavy haulage equipment completely redundant.
4. Peer to Peer Lending Market
This is one more alternative investment strategy that most people wouldn’t have considered. There are plenty of peer to peer lending markets around the world that offer between 5% to 15% per annum return on capital for participating in the public pool of funds that get lent out to people.
Yes its risky. So is going to the supermarket these days. All investment carries risk. Some more than others. I am not trying to encourage you to make any specific investments into anything. I’m simply trying to expand your horizon so you become aware of what’s out there.
5. Equity Crowd Funding
Similar to peer to peer lending, equity crowdfunding works on the basis of taking your brilliant idea to the market on the back of funds from mom and pop investors, without having to go through the rigmarole of raiding funds on the stock market.
If you were to lookup some of the popular peer to peer marketplaces in your country, you will find lots of different projects people are working on around the world. Some are downright lame but there are some that are really quite something. It’s a case of having the eye to spot a winner, well ahead of time.
It takes a bit of knack and skill… but its not that hard.
6. Option Transfers
These are an all time, waterproof way of making money from Property without actually getting directly involved in it. If you have done our Crisis Investing program, then you’d be familiar with how to use options for various type of property transactions.
A Call Option, in its simplest definition, is a legal instrument that gives you (the option holder) the right to buy a property, at a pre-determined price, at a pre-determined time under pre-determined conditions.
Most traditional investors, and to my surprise, a very (embarrassingly) large portion of industry professionals, have never heard of these instruments.
In our SMART Renovator series, we teach how to use this strategy for getting into cosmetic renovations to flip the property for a profit, without using your own money to do the reno.
What makes options such a powerful tool is the fact that they are a transferable legal instrument. Meaning, you can enter into an option deal over a piece of land that has subdivision potential, and then, instead of locking your own capital into the deal, you can offload it to a developer who will have the money and resources to do all the work. You simply get paid for negotiating the option deal to begin with. Very smart. Takes time. But very very smart.
7. Private Real Estate Trusts
Lastly, I want to talk briefly about private property trusts. In its simplest form, its a trust that is setup by a group of individuals (usually around 5-10) with the express purpose of pooling in financial resources, bank lending/borrowing abilities etc. to buy properties.
The operating principle is exactly like that of a Real Estate Investment Trust. In fact , there’s no difference between a REIT and a Private Property Trust (PPT), except that most REITs are listed on the stock market.
If you find a good lawyer, you will be able to get this setup very quickly and easily for relatively small amount of cost.
Our SMART Portfolio Builder program teaches how to assemble the right team of professionals and how to find the right kind of properties that will carry the rental returns as well as capital gains potential. In that program, we have something called a Rapid Action Plan, which is a a step by step approach to acquiring 15-20 properties in a space of 7 or 5 years.
This is all the more possible if you learn how to establish a PPT – which is included in this course as a separate handbook.
So there you go guys. 7 alternative investment strategies that can help you take advantage of the post-pandemic economy.
As always, the only question I have left to ask is this:
Paratus es facinus?
THE CRISIS CONTINUES TO DEEPEN
JOIN OUR WEBINAR TO SEE HOW YOU CAN MAKE MONEY FROM THE CURRENT CRISIS WITH LITTLE CASH AND A BIT OF KNOWLEDGE & DETERMINATION.
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