When the stock market is experiencing increased volatility, many investors will make the strategic decision to sell their positions and invest in a different asset class. For some, this means investing in less risky assets to mitigate losses until the market rebounds, and for others, it might simply mean investing in other high-risk assets but ones that aren't necessarily correlated to the movement of traditional stocks. In any case, it's important to have a strategy in place and to move quickly when the market becomes temperamental, and fortunately, online platforms like Yieldstreet make it easy to deploy an alternative investment plan before it's already too late.
Whether you're looking to find a safe haven for your capital, or simply shift your risk exposure to an alternative market, here are a few asset classes to consider when investing during volatility.
Cash - When the market is uncertain, sometimes the best approach is to simply liquidate your stocks to avoid considerable losses, and then focus on accumulating cash through regular sources of income. This is a popular strategy during volatility, particularly among investors who believe that the market will continue to fall in the short term. By keeping your cash safely in the bank via a traditional checking or liquid savings account, while also bringing in additional income, you'll have more to invest back into the market when prices have eventually bottomed out.
Real Estate - While the real estate market is often negatively impacted by volatility, this can also be viewed as an opportunity to invest in a famously high-performance asset class while property values are experiencing a dip. This approach becomes even more attractive when you consider the fact that real estate is an incredibly diverse asset class, and the ways in which investors can get involved are constantly expanding. For example, crowdfunding sites like Fundrise and Groundfloor make it easy to own shares in multiple properties without applying for a mortgage. Similarly, you can own income-earning shares in properties by buying into real estate investment trusts (REITs), which tend to be designed around market conditions and are primarily focused on capital appreciation over time.
Crypto - It might sound counterintuitive, but there are plenty of investors who believe there is no better time to invest in crypto than during periods of increased volatility. After all, with great risk can come even greater rewards, and historically those who have been bold enough to invest in top cryptocurrencies during a market pullback have been the ones to experience life-changing returns. And sure, while there may be a steep learning curve for investors looking to trade crypto on their own, there are now a number of options for those who would rather take a hands-off approach, while benefiting from the strategies of more knowledgeable and experienced investors. Yieldstreet's recently launched Enhanced Crypto Fund, for example, provides investors with rules-based, diversified exposure to the top-performing digital assets on the market.
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Original Source: Asset Classes for Investing During Volatility
