December 13, 2017 | 7:12 am
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9 Types of Alternative Investments for a Recession-Proof Portfolio

recession

After The Great Recession of the late 2000s, you might be justifiably worried about your portfolio being vulnerable to future recessions. That’s OK. The good news is that there are alternative types of investments that will help to make your portfolio recession-proof. Here are some key ones:

  1. Multifamily Houses/Apartments

Due to the high cost of mortgages, the chance of foreclosures is causing many homeowners to return to renting. This provides an outstanding window of opportunity for investors. According to experts this type of investment should remain a viable option for the next half decade or so. Based on the food-clothes-shelter “rule,” it has a ton of promise for investors.

  1. Education

When the economy and job market aren’t doing well college graduates might question the value of investing in higher education. Still, it’s difficult to put a monetary value on education. It provides job training, instruction in several fields, and the lessons of completing a 4-5 yr. goal. In fact, when the economy isn’t doing well many people decide to go back to school.

  1. Art and Collectibles

Art and collectibles such as cars and jewelry often retain value and actually increase in value over time, regardless of how the current financial markets. From Rembrandt to Warhol, art is typically a recession-proof investment that will keep you in the black when the stock market is black and blue. Plus, whether or not the stock market is heading upwards or downwards, you’ll be able to enjoy the aesthetic value of the art in any climate for investors.  Business Insider provides some outstanding tips for those who just getting started in art collection.

  1. Pay Off Credit Card/Mortgage Debt

If you fail to pay for the purchase of a good or service, if you pay the minimum balance due you can easily pay the item two or three times. Many financial experts that you settle your credit card/mortgage debt before you start making investments such as in the stock market. The opportunity cost of not paying big bucks in interest is certainly worthwhile.

  1. Agricultural/Ranch Land

Even when your wallet is on a diet, you’ll still need to eat. The demand for food will keep rising due to the rising worldwide population. These factors will allow the agricultural/ranch land to hold their value. In fact, leasing land that’s farmable tends to provide a return of 5% to 8%, according to experts.

  1. Oil and Oil Production

While certain types of investments are a slippery slope during a recession, oil tends not to be. For better or worse, oil and gas remain popular forms of energy. The will continue to provide cash flow in the long-term. This makes them a fairly wise investment regardless of how the stock market is performing.  Oil and Gas Investment Bulletin provides some excellent advice to help guide you in your oil and oil production investments.

  1. Small/Mid cap steel

This is a type of investment that might not seem promising at any particular time. However, if you can afford to hold onto these stocks, they can provide an outstanding long-term return. The energy world is a bit on edge about nuclear investment.

  1. Rental Space Storage

The late comedian George Carlin once had a hilarious bit about people’s “stuff.” Rental storage space is one way that people deal with their extra stuff. This is an outstanding type of long-term investment. People often don’t want to move their possessions once they’ve put it in storage.

  1. Hedge Funds

Contrary to popular belief, you do not need to be a millionnaire or billionaire to invest in hedge funds. Sure, you cannot just jump in this lucrative vertical with just a few hundred dollars, but the minimums are lower than most people think. In fact, Hedge Fund Guide reports that people with around 1 million dollar in assets are eligible for most hedge funds. While that may seem like a large number, it remains fairly achievable for most upper middle class retirees to reach such a portfolio size by the time they reach 65 years old.

Also, due to the hassles of transferring their items in storage, it’s unlikely that your customers will shop around even if you increase the rates (within reason, of course). Nu Wire Investor shares some tips for investing in self storage facilities.

This video is also very helpful at understanding what alternative investments are available out there and why every investor should consider them.