The Benefits of Investing in Alternatives During Volatile Times

With inflation rising, finding high yield secure positive cash flow investments is not just wise but crucial in weathering the storm. The thing to understand about this current economic climate is that investments such as stocks, cryptocurrency and property are all dependent on factors such as inflation, cash rates and global markets. What usually happens then is that investors tighten up in fear of words such as recession and depression. The news along with market crashes would have them believe that all investing is a no go right now, but the truth of the matter is that’s not exactly the case. 

It’s time to truly make your money work for you. The best way you can do that is by investing in alternative assets.

What are alternative assets? 

The term alternative investments is broad but includes asset classes that don’t fall into the conventional categories such as stocks and cash. These assets include art and antiques, commodities, managed futures and derivatives contracts. Due to their diversity, they provide a reduction to overall portfolio risk. Typically, alternative assets have low stock market correlation, the investments are backed by collateral and they’re only for a short duration. This means you can pull your initial investment out plus the gains and walk away or reinvest, continually receiving a passive income. 

Sustainable investments are a prime example of strong alternative assets that thrive during times of economic downturn. These investments are environmentally conscious and/or going to have a positive impact on our planet. Part of the issue right now is that there is a shortage of building materials and construction aggregate. Sustainable investing mitigates this issue by utilising technology and production methods that don’t rely on scarce commodities such as timber or silica. 

Foxi Capital is actively raising funds on investment opportunities that aren’t affected by inflation or an impending recession. The benefits of Foxi includes 12% interest paid yearly in advance, which can be used to offset the burden of inflation. 

Recession Resistant Industries

Have you ever looked into the term ‘Recession Resistant Industries’? There are specific industries and products that can withstand the effects of a recession due to necessity and demand. These industries include:

  • Grocery and Discount Stores
  • Cosmetic Industry
  • Health Care
  • Alcoholic Beverage Manufacturing
  • Consumer Staples 
  • Death and Funeral Services 

Most of these are essential services, hence their ability to thrive during a recession but other industries such as streaming services and cybersecurity are also now thriving in down economies. 

The Bottom Line

Whilst an argument can be made that certain alternative investments are higher risk than traditional types such as stocks and bonds, a majority of them are incredibly recession resistant. This means they have the unique ability to help investors ride out the worst of times during  economic downturn. Look at stocks for many industries right now, particularly industries such as Buy Now, Pay Later which market share is nosediving similarly to cryptocurrency. That’s why it’s so important to do your due diligence and actively research what industries/investment opportunities will weather a recession but more importantly thrive during one. 

DISCLAIMER: The contents of this article are intended as general advice only. No specific person’s circumstances, financial situation or objectives have been taken into consideration. You should not act on the information provided without seeking personal advice from an appropriately qualified financial planner.