When the pandemic started, who knew it would lead thousands of people to want to invest their money in stable markets… like wine and comic books?

The emergence of COVID-19 in 2020 caused economic volatility all over the world — including bringing an end to the 11-year bull stock market in the U.S. It also kept people indoors, where they reconnected with their favorite hobbies en masse.

The intersection of those two trends triggered an increasing interest in alternative investments (those not tied to the public markets) such as art, antiques, gold and silver, real estate, comic books, trading cards, and even sneakers. Yes, sneakers as an investment.

A study from Wealth Advisor published in mid-2020 revealed not only are more investors now aware of alternative investments but they are also interested in adding them to their portfolios [1].

One main reason these investments have taken off? While in the past, they were the domain of the ultra wealthy, they’ve recently become more accessible to all of us thanks to the emergence of alternative investment apps. With as little as $500, these apps give everyday folks the chance to dabble in a variety of off-the-beaten-path investments.

In this article, we’ll take a deeper dive into the alternative investment space as well as many of the top apps which are democratizing the market. (It’s also very important for us to remind you here that while we’ve researched this topic and are quite savvy financially, this is not official investment advice. All investments have risks you’ll need to assess yourself or with your financial professional.)

Questions About Alternative Investments

How does alternative investing compare to traditional investing?

If you’re interested in exploring alternative investments, it’s important to first understand exactly what doing so entails. Perhaps the most significant difference between traditional investments (such as stocks and bonds) and alternative investments is the latter are not tied to the markets. And because these types of investments are not impacted by market volatility, they can provide a beneficial diversification of your portfolio.

There are trade-offs for that more gradual rise and fall, however. Alternative investments (unlike traditional investments) generally require tying up or committing your money for several years to see real gains — anywhere from five to 10 years in some cases — and you may not see any distributions during that time.

Plus, alternative investments can be more difficult to liquidate or sell for cash if the need arises. This is because it can be hard to put a value on things like rare sneakers or trading cards; also, there may be fewer buyers for such unique valuables.

Is it safe to invest in alternative things like wine and art?

Alternative investments can be an exciting way to put money into things you’re personally passionate about or to invest in your hobbies, such as collecting valuable trading cards or rare wines. However, this form of investing does come with some downsides or risks that are worth considering.

While alternative investments are generally covered by the Dodd-Frank Wall Street Reform and Consumer Protection Act [2] (which was established after the financial crisis of 2008 to promote transparency and stability in our financial system) for instance, the majority of these types of investments are subject to less oversight and regulations by the U.S. Securities and Exchange Commission. 

Additionally, alternative investment funds generally do not publish the same type of verifiable performance data as traditional stocks and mutual funds. For these and other reasons, alternative investments can be prone to scams or fraud. That means you’ll want to be sure to do your research thoroughly before putting money you can’t afford to lose into an alternative investment.

Plus, whenever you’re investing in a tangible item, you’re subject to forces of nature; if a sinkhole swallows the warehouse where your wine investments are stored, you’ll be relying on insurance to try to recoup whatever you can.

On the flip side, for those who do their research and invest carefully, alternative investments offer the potential for very high returns and can be way more fun to research and monitor than traditional investments.

How do I get started with alternative investments?

While you could work with an institution or financial advisor, if you just want to jump in, there are lots of new apps and digital platforms where you can access these types of investment opportunities directly.

If you’re just starting, it may be a good idea to have the guidance of a professional before plunging into alternative investments on your own. Those who feel a bit more confident or who are savvier investors may want to check out some of the websites and apps dedicated to alternative investments.

10 Great Websites for Alternative Investments

Masterworks - invest in art

Masterworks bills itself as the only platform that makes it possible to invest in priceless artwork. The New York City-based company launched with a mission to democratize the opportunity to invest in works by such legends as Banksy, Kaws, Basquiat, and others.

But how exactly does it work you ask? The Masterworks platform allows investors to buy and sell shares of an investment in iconic works of art.

More specifically, the experts on the Masterworks acquisitions team purchase good pieces of art at a fair price. After that, the company files an offering with the SEC that allows anyone to invest in the specific piece of artwork in question. Masterworks will then hold the painting anywhere from three to 10 years before selling it, at which point investors receive the proceeds.

Investors also have the option to sell their shares in the painting sooner on the secondary market (though there is no guarantee you will find a buyer when going this route).

Yieldstreet - invest in real estate (and more)

Similar to Masterworks, the Yieldstreet platform provides access to alternative investment opportunities that have historically been reserved for the wealthiest individuals. Through Yieldstreet, individuals can access a variety of alternative investment funds that encompass a range of asset classes, including art, supply chain financing, and most notably, real estate.

Some of the funds allow investors to get involved with as little as $500 while others require a minimum investment of anywhere from $10,000 to $15,000. The Single Family Rental Diversified Fund I, for instance, is a portfolio of rental properties throughout the United States. The minimum investment for this fund is $15,000.

The majority of the funds offered by Yieldstreet may payouts on a regular basis, some are monthly, others are quarterly.

EquityMultiple, RealtyMogul, and other real estate investment platforms

EquityMultiple is another well-known real estate investment platform. It was launched to make an investment in commercial real estate more accessible for individual investors and offers pre-vetted projects that can help you diversify your portfolio. Investment minimums start at just $5,000 and the platform has a historical rate of return of about 17%. EquityMultiple also promises transparent reporting, which isn’t always the case in alternative investments.

A similar platform in this space is RealtyMogul, which also offers individual access to commercial real estate investments. RealtyMogul members are able to create their own real estate portfolios, including diversifying their holdings with investments in individual properties and also Real Estate Investment Trusts or REITs.

RealtyMogul says it currently has more than 219,000 members and $4 billion worth of property financed, including more than 15,000 apartment units. Investment minimums are as low as $5,000 though many are in the neighborhood of $35,000.

Vint - invest in wine

Calling all wine lovers: Vint allows investors to get started with less than $100 (and no annual fees). For that price, or whatever amount you choose to invest, you’ll have SEC-qualified shares in some of the most legendary wines around the world. 

But why invest in rare wines? Aside from the fact that you may be a wine lover, for more than a century wine has been a pretty solid investment. Vint says wine investments are less volatile than stocks, and returns are better than those associated with art, bonds, or many other types of alternative investments.

More than $500,000 has been invested through the Vint platform. Getting started simply requires creating an account with Vint, after which you’re able to view all past and upcoming collections offered for investment. Upcoming investment opportunities are offered exclusively to Vint account holders for five to seven days ahead of a public launch.

An important caveat here: When investing through Vint, you are not able to sell your shares. The platform points out that wine is a long-term investment and those who intend to buy and hold will generally need to plan on holding onto the investment for anywhere from three to seven years. At the end of that timeframe, Vint liquidates the assets and you receive proceeds.

Rally - invest in collectibles 

Collectibles have taken off since the start of the pandemic, and if you want to get involved in the market without actually buying (and storing) those collectibles, Rally is a good choice. The platform is dedicated to allowing investors to buy and sell equity shares in various collectible assets — things like the first issue of Macworld magazine signed by Steve Jobs, a 1955 Porsche 356 Speedster, or a 1963 X-Men #1 comic book.

The process involves the Rally team sourcing, verifying, and acquiring rare and valuable items from collections and individuals around the globe. Once the item is acquired, Rally turns it into a “company” (with regulatory qualifications of course) and then splits that company into equity shares. That’s where you, the investor, comes in. Rally opens an initial offering on its platform and investors of all financial backgrounds can purchase shares.

And unlike many of the other alternative investments on this list, Rally investments can be sold after 90 days on its app or on periodic trading days.

Republic - invest in video games

When it comes to alternative investments, it seems there’s a platform for every passion or interest — including those who love all things video games. Republic promises access to highly vetted investment opportunities in everything from start-ups to crypto to real estate and yes, the aforementioned video games. 

You’ll be investing in video games through Republic’s newly-acquired platform Fig, the leading publishing platform for video games with investment opportunities.

When buying Fig portfolio shares, you invest in the success of the various games Fig funds. This includes new games and sequels to well-loved classics (Atari anyone?), and more.

Investors receive returns from a portfolio of titles twice each year. The platform says previous Fig games returned up to 300%.

Alto - alternative investment options for your IRA

While IRAs are a pretty traditional retirement investment vehicle, Alto allows you to venture into alternative opportunities with your retirement account.

Alto offers self-directed IRAs (SEP, Traditional, and Roth) through which you can invest money in alternative asset types, including crypto.

To get started you simply transfer money from an existing bank account into an Alto IRA. The fees associated with Alto IRAs range from $10 to $25 per month.

Alt - invest in trading cards

An option for all the sports fans out there, Alt (which bills itself as “the next wave of investing” ) is an alternative asset platform that allows for investing in trading cards. The Alt exchange lists more than 7,000 assets available for purchase, ranging in price from under $100 to thousands of dollars.

The Alt platform sells trading cards for nearly every sport you can think of — from MMA to boxing, racing, golf, tennis, and (of course) baseball. 

There are also liquid auctions on the Alt site, through which trading cards sell for upwards of $50,000 in some cases.

FarmTogether - invest in farmland

Even if you’ve never set foot on a farm, you can now invest in one. One of the most prominent platforms where you can do this is FarmTogether. 

Unlike stocks and traditional investments, farmland is a low volatility investment, according to FarmTogether. The NCREIF (farmland index) has not had a negative year since 1991, and average returns through FarmTogether average about 10.85%.

Getting started simply requires signing up and using the platform to browse through potential investments. There are also due diligence materials available for your review. Investment opportunities range from crowdfunded farmland offerings (with a minimum $15,000 investment) to sole ownership bespoke offerings (for those with very deep pockets). 

Rares - invest in sneakers

We did mention investing in sneakers at the start of this post, and here’s where that opportunity comes in. Rares is an investment platform aimed at culture junkies. Through Rares you can make fractional investments in the rarest sneakers.

How rare? Rares has everything from the first-ever Jordans to the Yeezy 1 prototypes Kanye West wore at the 2008 Grammys. These are just some of the fractional investment opportunities listed for as little as $12 to $16. 

There is no minimum account balance required to open an investing account with Rares — and you can get started with as little as $10. Simply sign up and begin purchasing fractional shares to build your portfolio.

After the IPO users who hold shares in a specific sneaker can either hold on to those shares or trade them with other users on the platform as the value of the shoe changes. In addition, when Rares auctions or sells the shoe, users who have shares will get a payout.

Alternative Investments: Conclusion and Takeaways

Alternative investments have the potential to be both an exciting and lucrative option for your money — and thanks to a wave of new websites and apps, it’s now incredibly simple to get started.

There are pros and cons to alternative investments. They can be less volatile and more interesting than traditional investments, and also have significant potential upsides. However, they often require longer holds, the data is less transparent, and there’s plenty of potential for fraud.

But with good research and by investing through credible platforms, you could find alternative investments become a reliable part of your portfolio.

Some alternative investment websites are:

• Masterworks, where you can invest in art.

• Yieldstreet, where you can invest in real estate and more.

• EquityMultiple, RealtyMogul, and other real estate investing platforms.

• Vint, where you can invest in wine.

• Rally, where you can invest in rare collectibles.

• Republic, where you can invest in video games.

• Alto, where you can use alternative investments for your IRA.

• Alt, where you can invest in trading cards.

• FarmTogether, where you can invest in farmland.

• Rares, where you can invest in sneakers.