American elections, devaluation of the traditional currency, crisis of citizens’ confidence in traditional banks, and lack of projection, traditional investments are looming large in this already turbulent year 2020. We have been talking to you about alternative investments at Thecointribune for a few months now, so we immediately have in mind investment in gold and precious metals, but imagine that this is not the only one!
From investments in wood, works of art, wine, or even green finance, let’s start an overview of the possibilities to take the gangway to ensure safe and profitable investments! Of course, we can’t help but slip you in on some of our favorite crypto projects that combine the best of both worlds.
Warning : This article is brought to you by Vera One. Crypto investments are risky by nature, do your own research and invest only within the limits of your financial capacity. This article does not constitute an investment invitation.
Alternative investing: kezako?
It all starts at the base with anomalies observed in traditional monetary systems. One fine day, you and I heard about negative interest rates, the skyrocketing of negative yielding bonds, and therefore quite a turnaround for savers who could end up with less than what they need. ‘they deposited, the last straw!
In terms of investment security and long-term vision, the range of choices is therefore seriously reduced, unless … we look at the famous alternative investments!
True long-term capital protection, with even some of the best returns of decades, our treasures are arguably for many of us the hoped-for way out of this gloomy situation.
Also, seasoned investors believe that inflation will be much higher in the next 5-6 years, one more piece in the alternative investing machine that provides you with a hedge against inflation.
So beyond gold and precious metals that we deal with fairly widely together each week, we of course find cryptocurrencies and foremost among which is Bitcoin which continues to reach new heights. We also find there real estate, the stone was a safe bet. But, we also see collector’s items (collector’s car, works of art, sculptures, etc.), wine, wood, and even green finance which also allows you to do something for the planet. Closer to us, we finally found for a few years crowdfunding and its derivative ICOs.
In short, in short, an alternative investment, regardless of the form it takes, allows you to invest and make a more or less risky investment on completely different assets that are profitable or even, pay big and come out of the traditional circuit. banking.
Concretely, leaning towards alternative investments amounts more or less to following the following classic process:
- Maximize profitability generated by an asset portfolio
- For a given level of risk
- On a given temporality scale
And like any recipe, the bonus is of course for the more knowledgeable of you, diversify its asset portfolio as best as possible in order to optimize it.
Alternative investments fit well in this well-known process since they constitute very different categories of assets that do not necessarily have links between them and are not correlated to the market, and moreover, they have levels of return and very different profitability.
So what are the essential things to know and the pitfalls to avoid?
The “Dos” and “Don’ts” to have in mind before starting
Investing your money and seeing it grow every time is the dream of many of us. But not everything is that simple, and as we explain to you in many of our articles on cryptocurrency, investing in alternative investments should be thought out and carefully thought out.
You are not without having There is no such thing as high return without high risk, so remember this popular saying: invest only what you are prepared to lose.
In the case of an alternative investment, the real “do” is first to check that the chosen investment is suited to your objectives, in terms of duration, risk and return. Next, you need to be sure of your financial means.
The first “don’t” is to Above all, do not launch your eyes closed into the first property that seems nice to you without having first collected useful information about the interlocutor (company data) but also verified that it did have an AMF registration number allowing it to market such investments.
The AMF broadly tightens the controls on the investments of so-called “alternative” goods and it is therefore important to read the conditions, even those written in small and italics at the bottom of the page.
By the way, speaking of AMF, remember that the French stock market gendarme granted soon one year its VISA for ICO projects.
In short, Only invest in products you know and can assess risk for. Do not invest all of your savings, always keep liquidity, and above all we cannot repeat it enough, verify the identity of the company.
Finally, remember that there are two types of alternative investing:
- The diversification strategies compared to traditional investments which make it possible to project on decorrelated performances, such as to compensate for the volatility of interest rates;
- The so-called “substitute” strategies looking for convexity to compensate for market volatility thanks to a market “beta”
Now that you have the keys to get started, let’s take a quick tour of the different alternative investments that we will have the opportunity to present to you in more detail in future articles.
A world tour of alternative investments
Far from aiming for the exhaustiveness of the panel of possible alternative investments, we will focus on 4 of them that we particularly like because they are particularly close to crypto or blockchain projects :
- Gold, the oldest safe haven of all time
Gold, no need to introduce it to you, is still today an asset that is insensitive to the wrinkles of age, offering a guarantee of stability and security, and what is more, attractive returns, especially in recent times. Gold is also the most popular precious metal for investors around the world, ahead of silver, copper and palladium, which also benefit from a global appreciation by investors. When you think that the price of gold hit $ 2,000 last August, and that some of the finest analysts are predicting a bright future (perhaps not as much as its digital counterpart: bitcoin), it would be silly to ignore it. How to invest in gold in 2020? It was the subject of one of our previous articles, go take a look.
Among the major players in gold sales today, we find our friends Aucoffre.com and all their branches who have been able to innovate in this old world. First and foremost, the newest member of the family, I named VeraOne, who made the crazy bet of combining gold and cryptocurrency to our delight.
The principle ? It’s simple: you buy a VRO, or 1 gram of physical gold, that you deposit in the form of token in a wallet using technology Ethereum, and physical gold is stored and managed under your surname by the company. In record time, you therefore become the owner of a gram of gold, secure, tangible and verifiable for which your token constitutes the act of priority.
VeraOne is therefore a stablecoin backed by the price of gold held and well kept in Switzerland, and without revealing any well-kept secrets, they have not finished surprising us in the field of precious metals !!
In a context like the one we are experiencing today, what could be better than digitize and tokenize gold by allowing as many people as possible to access an investment as old as the world!
- Works of art and collectibles
Whether you are an art lover or have a good nest egg, investing in works of art allows for some profitability even if it requires some financial capital. Insensitive to different crises, works of art naturally constitute an interesting safe haven. If you buy a work of art for at least € 20,000 your profitability fluctuates between 5-8% per year. Several investment funds exist, and the sector has also embraced the crypto era: Christie’s notably sold a work of art thanks to non-fungible tokens (NFT), on Ethereum, just like Paris Hilton who sold a work of art on Ethereum for the modest sum of $ 17,000 or 40 ETH and we told you about it in the columns of Thecointribune.
- The wine and the vine
Vines and wine are particularly popular with Chinese investors, but not only! They represent a sustainable investment, particularly through the Groupement Foncier Viticole (GFV) which allows you to get up close and personal with excellent vintages!
The only data that can cause excellent profitability to fluctuate is seasonality, which, as you know, will or will not give a good vintage.
I wrote about wine and blockchain some time ago and it is true that there are many prospects in this area! It must be said that today, the blockchain intervenes “only” on authentication and traceability issues, crucial issues for such assets, but we have not yet identified an ICO to date on a wine project. -crypto: to be continued!
- Green finance or how to do something for the planet
Green finance is a real topical issue since it makes it possible to combine financial tools and governance, social and economic issues, making it possible to understand the challenges of the energy transition.
Ifri (French Institute of International Relations) even indicates in its analysis that the market would represent today € 217 million in green debt issuance in 2019. Here again, to avoid any drift and in particular greenwashing, the Banque de France supervised everything in October 2019.
In the field of renewable energies, a subject also present within the challenges of sustainable development, we also had the opportunity to write about WPO, which has been in the spotlight for a few weeks. And for good reason, they are creating a Green token to optimize transactions on the renewable energy market.
Beyond this superb initiative, several alternative investment funds (AIFs) make it possible to invest while taking into account environmental, social and governance (ESG) criteria, and therefore propose to combine financial strategy and ethics.
You can also invest in forest land groups (GFF) and thus preserve this green lung while benefiting from the profitability of wood, a new fashionable asset.
So, are you ready to go? Beyond these investments, crowdfunding and therefore ICOs for crypto are also the alternative investment for millennials since it allows money to be injected into start-ups or promising projects. Finally, real estate, of course, as we mentioned in the introduction, represents an excellent alternative investment.
If you also want to get into alternative investments, and in particular gold thanks to VRO, do not hesitate to read our articles in the platform for alternative investment ! The best is yet to come !
Karen is passionate about new technologies in general, and blockchain in particular! Finding out about trendy news, the latest market developments and the treasures of the ecosystem, she is happy to help you discover this universe in all its colors.