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5 Alternative Investment Avenues Suitable For Retirees

Alternative investments can be a good option for your retirement planning, or you may also invest in them after retirement

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Amit Sethi
November 24, 2023
Alternate Investment Avenues For Retirees

Alternate Investment Avenues For Retirees

Most of the investment products are either linked to the equities or the debt market. Any volatility in the equity market pushes the investors towards the debt market, or a low return in the debt market pushes them back to the equity market. The investor gets into this investment loop, assuming there is no alternative to it. There are some very good alternatives available in the market, and they are called alternative investment products. Seniors can use alternative investment options for better diversification and provide more stability to their portfolios. Here are 5 alternate investment avenues for retirees they can explore in sync with their requirements.

Real Estate Investment Trusts (REITs)

REITs function like a mutual fund product with the difference that they invest in real estate to generate income from rents as well as capital appreciation from selling property, whereas mutual funds income comes from investing in equity or debt assets. Seniors who can’t make huge investments in real estate can choose the REITs to get an entry with a low-ticket investment. Before investing, always check the quality of the REITs; for example, you may check the occupancy ratio, quality of asset portfolio, diversification in terms of location and types of properties, etc.

Investment In Fractional Real Estate Product

There is another option to participate in the realty investment apart from the REITs; it’s called fractional ownership of the property. There are a few companies that allow their customers to choose properties from their portfolio and invest in them to become part owners. Usually, fractional ownership deals in commercial units. The entry ticket size in the fractional ownership is normally higher than the REITs. REITs are publicly traded, whereas fractional ownership allows a direct investment in a specific realty project.

Peer To Peer (P2P) Lending 

P2P lending allows investors to lend their money to individuals through available online platforms and earn a decent interest income on it. The investor gets the option to select the category of the borrower to whom they want to lend money, and according to the risk, amount, tenure, and other factors, the interest is decided.

P2P lending can be one of the alternate investment avenues for retirees, but it also carries a little higher risk compared to other alternative investment options discussed here.

Investing In Art

Investing in Art can offer you a very good return, provided you have a little knowledge about the buying and selling procedure. Komal Jain, Co-founder, ArtlyCraftly.com suggests, “If you are planning to invest in an Artwork, always check the past work of the artist, their participation record in the various Art auctions, and you may also consult an art expert or an art dealer for sweetening the deal”.

Alternative investment options should be used in consultation with your investment advisor, and you must not disturb your retirement goals by doing something different!

 

The author is an independent financial journalist

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