Alternative investments you should know about in 2020

In this current economic landscape, few people know what to do. In the post-Brexit era, even specialists are shy with predictions. However, people keep investing.
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Published 17th Feb 2020, 20:57 BST
Updated 19th Feb 2020, 20:06 BST
Alternative investments advice from Admiral MarketsAlternative investments advice from Admiral Markets
Alternative investments advice from Admiral Markets

Being a client-oriented company, Admiral Markets’ mission is to become a global leader in providing comfortable access to every type of financial instrument, while empowering clients with relevant education, competitive trading terms, an engaging community and prompt customer support.

Here they outline alternative investments you should know about in 2020.

Trying making money by investing in diverse financial instruments – stocks, bonds, and real estate – preoccupies all of us, especially now, when we don’t know how Brexit will affect our financial security in the long term. However, you have other investment options out there.

While such alternatives come with their fair share of risks, they may also generate excellent profits.

1. Forex Trading

You probably know you can trade pairs of foreign currencies. The Forex market is the traders’ favourite playground for years.

Since currencies rise and fall in value against each other, as an investor, you can make money by profiting of these fluctuations. Besides trading with currencies’ pairs, you can also trade with CDFs.

These are interesting instruments in Forex. They allow you to speculate with the potential future values of the currencies without you having to buy them.

How to Start Forex Trading

Before you invest in trading software, it is best to test live the Forex market by using a Forex demo account.

Pick a brokering company and use their dedicated tools for you to understand how things work. A demo account is a preferred choice for beginner traders. It offers live-market experience, free and live market data and market indicators & news, and so on.

You may also want to participate in seminars and webinars organized by your broker. The better you learn how to use the software at its maximum potential, the faster you can access a real account and start trading.

2. ICOs

Initial Coin Offerings (ICOs) are relatively new on the market and quite risky. Nevertheless, they are increasingly popular.

Such instruments represent the way companies get funding to make cryptocurrency. Cryptocurrencies have indeed taken a beating as of late, but blockchain projects still receive financing.

The problem with ICOs is that you need to find crypto projects that look good on paper and have decent chances of success. You should also tell apart potentially profitable ICOs from frauds.

In the UK, the Financial Conduct Authority (FCA) does not have substantial regulatory criteria for ICOs, but rather case-to-case ones.

How to Start Investing in ICOs.

The first thing you need to do is check that the people or startup putting up the ICO are accountable and real. After all, you give them money and hope their cryptocurrency will rise from the ground and circulate enough to become valuable and make you a profit on your investment. Herein the risk.

The second thing you should check is experience. If you want to invest in an ICO, check the entrepreneur’s or firm’s experience with cryptocurrencies and blockchain technology. If you lack such knowledge, gather resources and learn.

There are plenty of resources to offer information about current ICO calendars, read the documentation behind them, and do your background checks on the ICO proponents.

3. Peer to Peer Lending

This rather new type of investment also comes with risks. The system works by connecting people who need to borrow money with people who have money to lend.

These financial matchmakers cut out the banking intermediary.

As a lender, you can get much higher interest rates than you would with a savings account. Borrowers usually pay less than with a traditional loan. The peer-to-peer platforms or websites also take a fee. In an ideal world, this system works for all parties involved.

The risk lies with the borrowers. If they could not access a traditional loan and use the peer-to-peer lending opportunities, it means they come with a poor credit history or they are not eligible for conventional loans.

The advantage is that as a lender, you can make hefty sums. You will not make a fortune, but you can turn your savings into an investment and the regular interest in a steady income.How to Invest in Peer-to-Peer Lending

You should thoroughly research and pick the most reliable websites/platforms for peer-to-peer lending. The best part is that once you chose a secure platform, it will do the background check on the borrowers.

Such websites check credit history and do risk assessments. They also take care of the repayment process.You may also want to check the FCA’s regulations on this lending system as well. In the UK, peer-to-peer platforms such as Zopa.

Funding Circle, and Ratesetter provide investors with rates of around 6%. You can make a streamlined income as long as you know the risks.

Have you ever tried one of these alternative methods of investing?

Would you instead go with Forex trading, savings accounts, peer-to-peer lending or the more traditional stocks and bonds?