5 Top Alternative Investing Apps to Diversify Your Portfolio Beyond Stocks
Investing in stocks is a popular way to grow your wealth, but it’s not the only game in town. Alternative investments offer unique opportunities to diversify your portfolio and potentially generate higher returns. Here are five top alternative investing apps that make it easy for you to explore these options:
Betterment: A Robo-Adviser for Cryptocurrency
style
=”font-size:14px; line-height:1.5;”>Betterment is a well-known robo-adviser that has expanded its offerings to include cryptocurrency investments. With Betterment, you can easily buy and sell Bitcoin (BTC), Ethereum (ETH), and several other popular digital currencies with no added fees. The app also provides access to a team of experts for personalized advice.
Stash: Invest in Fractional Shares and Alternative Assets
Stash offers a unique investment platform that lets users buy fractional shares of stocks, ETFs, and even alternative assets like art, gold, or Bitcoin. With a low minimum investment ($1), Stash makes it easy for beginners to start building a diverse portfolio.
Mintos: Peer-to-Peer Lending Platform
Mintos is a peer-to-peer lending platform that allows users to invest in loans issued by various loan originators across Europe. The platform offers diverse investment opportunities with attractive returns, ranging from consumer loans and business loans to real estate projects.
Robinhood Gold: Access to Alternative Investments for a Monthly Fee
Robinhood Gold is a premium subscription service offered by the popular investing app, Robinhood. For a monthly fee, users gain access to additional features like level 2 market data, extended hours trading, and the ability to invest in alternative assets such as cryptocurrencies, options, or gold.
5. Fundrise: Real Estate Investing for the Masses
Fundrise is a real estate investing platform that allows users to invest in eREITs and eFunds, which offer diversified exposure to commercial real estate projects across the United States. With a low minimum investment ($10), Fundrise makes it easy for individuals to access the potential benefits of real estate investing without the need for large capital or expertise.
Disclaimer: The information provided is for educational purposes only and should not be considered investment advice.
The Importance of Portfolio Diversification and Top 5 Alternative Investing Apps
Portfolio diversification, the practice of spreading investments across various asset classes and securities, is a fundamental concept in finance. It aims to mitigate risk by reducing the exposure to any one particular investment or asset class. The global financial crisis of 2008 served as a stark reminder that concentrating investments in one sector or asset class can lead to significant losses.
Alternative investments
, which include assets other than stocks, bonds, and cash, can be a valuable addition to a diversified portfolio. Alternative investments offer unique risk-return profiles, potential for low correlation with traditional assets, and a hedge against inflation and market volatility. In this article, we will focus on the top
five alternative investing apps
that provide access to a range of alternative investment classes and can help investors diversify their portfolios effectively.
Robinhood
Robinhood, a free-trading platform, offers access to stocks, ETFs, options, and cryptocurrencies. With zero commission fees, it’s an excellent choice for beginner investors looking to explore alternative investment classes.
Ally Invest
Ally Invest provides access to a range of investment options, including bonds, ETFs, and mutual funds, as well as alternative investments like options and forex trading. The platform offers low fees and robust research tools.
Stash
Stash is a micro-investing app that lets users invest in stocks, ETFs, and alternative assets like real estate investment trusts (REITs), commodities, and cryptocurrencies. It’s a great option for those new to investing who want a user-friendly platform with low minimum investments.
Acorns
Acorns is another micro-investing app that focuses on spare change investing. The platform offers a range of investment options, including ETFs, individual stocks, and alternative investments like real estate, precious metals, and artwork. It’s an ideal choice for those looking to build a diversified portfolio with small contributions.
5. Mintos
Mintos is a peer-to-peer (P2P) lending platform that allows investors to earn returns by lending money to individuals and businesses. It offers investment opportunities across various sectors and countries, making it an excellent choice for those looking to diversify their portfolio with alternative investments that provide attractive returns.
By using these top five alternative investing apps, investors can gain access to a wide range of alternative investment classes and build a diversified portfolio that reduces overall risk while increasing potential returns.
Background on Alternative Investments
Alternative investments refer to financial assets outside the traditional six asset classes: stocks, bonds, cash, short-term instruments, and commodities. Alternative investments include, but are not limited to, real estate, private equity, hedge funds, derivatives, and commodities. These investment vehicles offer unique features that may not be correlated with traditional asset classes, making them an attractive addition to a diversified portfolio.
Definition and Explanation of Alternative Investments
Alternative investments diverge from conventional investment strategies in several ways. First, they often have complex structures and may be less liquid than traditional assets. For instance, real estate investments require a significant upfront capital commitment and can take years to liquidate. Second, alternative investments often employ specialized knowledge or expertise, such as the ability to analyze private companies’ financial statements or an understanding of commodity markets. Lastly, alternative investments may offer potential tax benefits and fee structures that differ from traditional investments.
Benefits of Alternative Investments in Portfolio Diversification
The primary advantage of alternative investments is their ability to provide diversification benefits. Since they are less correlated with traditional asset classes, adding alternative investments to a portfolio can help reduce overall risk. For example, during market downturns, the value of stocks may decline, while the value of real estate or commodities may remain stable or even increase. This can help to mitigate losses and stabilize the overall portfolio’s performance.
Risks Associated with Alternative Investments
Despite their potential benefits, alternative investments come with inherent risks. For instance, they may be illiquid, meaning that investors may have difficulty selling their investments quickly if needed. Additionally, alternative investments often carry higher fees than traditional investments due to the specialized knowledge and expertise required to manage them. Lastly, alternative investments can be complex and difficult to understand, making it essential that investors fully understand the risks involved before investing.
I Top Alternative Investing Apps
Alternative investments have gained significant popularity among investors looking to diversify their portfolios beyond traditional assets such as stocks and bonds. With the rise of technology, several investing apps have emerged, making it easier for individuals to access these alternative investment opportunities. Here are top
Robinhood
Robinhood is a commission-free investing platform that offers cryptocurrencies, options trading, and margin trading. This app has revolutionized the way people invest in alternative assets with zero commission fees. It is available on both iOS and Android devices.
E*TRADE
E*TRADE
is a well-established brokerage firm with a broad range of investment offerings, including alternative investments. They provide access to
Stash
Stash
is an investment app designed for beginners, offering fractional shares and low fees. They provide access to ETFs and individual stocks, as well as alternative investment opportunities like
Webull
Webull
is a commission-free trading platform that offers stocks, ETFs, options, and cryptocurrencies. It provides advanced tools for active traders, like real-time market data and level II quotes. Webull is available on both iOS and Android devices.
5. Ally Invest
Ally Invest
is a discount brokerage platform offering stocks, ETFs, mutual funds, and options trading. They also provide access to alternative investments like
Conclusion
These top alternative investing apps
offer various investment opportunities to cater to different levels of experience and investment goals. Make sure to research and choose the one that best suits your needs before diving into the world of alternative investments.
Acorns: Your Personal Finance Companion
Acorns is a revolutionary micro-investing app designed to help users grow their wealth through small, frequent contributions. By connecting to your bank account or debit card, the app rounds up everyday purchases to the nearest dollar and invests the spare change into a diverse portfolio of ETFs.
How It Works:
Acorns operates on the principle of “investing your spare change.” Once connected, the app tracks and rounds up transactions. For example, if you buy a $3.50 cup of coffee, Acorns will automatically invest 50 cents. The app offers various investment options to cater to different goals and risk tolerance levels: Starter, 52-Week, Spare Change, Retirement, and Early. You can easily set up automatic transfers or manually invest.
Beyond Stocks: Expanding Investment Opportunities
Acorns goes beyond stocks. It offers additional investment options like robo-advisory services, ETF portfolios, and bonds. This diversity allows users to build a more comprehensive investment strategy, tailored to their financial goals and risk appetite.
Robo-Advisory Services:
Acorns’ robo-advisory service, called “Grow,” uses Modern Portfolio Theory to build and manage customized portfolios based on your age, risk tolerance, and investment objectives.
ETF Portfolios:
Acorns offers thematically-diversified ETF portfolios, allowing users to invest in various sectors and themes such as “Healthcare Innovators,” “Clean Technology,” or “Real Estate Income.”
Bonds:
For those seeking lower-risk alternatives, Acorns offers a fixed income investment option through its partnership with BlackRock, one of the world’s largest asset managers.
Pros and Cons of Alternative Investments with Acorns
Pros: Low minimum investment requirements, automated investing, easy-to-use interface, and diversified investment options. Cons: Limited customer support, potential higher fees for managed portfolios, and potential lack of personalized advice compared to traditional financial advisors.
User Experience and Interface Review
Acorns boasts a user-friendly interface that makes investing simple and accessible. With customizable investment portfolios, automatic round-ups, and a sleek design, it is an excellent choice for tech-savvy investors who want to start small but think big.
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Robinhood: A Game-Changer in Alternative Investments
Robinhood, a link, is transforming the investing landscape by providing commission-free trading for stocks, options, ETFs, and other investment products, including cryptocurrencies. Launched in 2013, the app is designed to be accessible and user-friendly for everyone, with no account minimums or hidden fees.
How It Works
Robinhood‘s app and web platform utilize a simple, clean interface. To get started, users need to provide basic personal information and link their bank account. Once approved, they can begin investing instantly with just a few clicks. The app allows for easy transfer of funds from your bank account to Robinhood’s, making it simple to start or stop investing whenever needed.
Investment Options Beyond Stocks
Options trading is a popular feature on Robinhood, which allows users to buy and sell call and put options. This advanced investment tool can be used for hedging positions, increasing potential returns or implementing more complex trading strategies. The platform also supports cryptocurrency trading for Bitcoin and Ethereum, allowing users to buy, sell, or transfer their digital currencies directly within the app.
Pros and Cons of Using Robinhood for Alternative Investments
Pros: Commission-free trading, access to a wide range of investment options, simple and user-friendly interface, and fast deposits and withdrawals. Cons: Limited research tools and educational resources, limited customer support, and no desktop application.
User Experience and Interface Review
The user experience on Robinhood is exceptional. The interface is sleek, intuitive, and easy to navigate, making it an excellent choice for both novice and experienced investors. Additionally, Robinhood offers features like instant deposit and real-time notifications, keeping users informed about their investments in real-time.
Stash: Your Personal Finance Companion
Stash is a revolutionary micro-investing app designed to help you save money and build wealth, even with limited funds. It offers an intuitive and user-friendly platform that allows users to invest in stocks, ETFs, and other investment vehicles, making it accessible for individuals who previously found the stock market intimidating.
Description of the App:
Stash simplifies the investing process by allowing users to invest as little as $5 at a time. With no account fees and low investment fees, Stash provides an affordable solution for those looking to begin their financial journey. The app offers personalized recommendations based on your risk tolerance, financial goals, and lifestyle, making it easy for anyone to get started.
Features and Functionality:
Stash’s features include automatic investment transfers from your checking account, a unique “Smart-Stash” feature which rounds up your daily purchases to the nearest dollar and invests the difference, and customized investment portfolios tailored to your preferences. The app also provides educational resources and tools, allowing users to learn about investing while they build their wealth.
Investment Options:
Beyond traditional stocks, Stash offers a variety of investment options, including ETFs (Exchange-Traded Funds), bonds, and individual stocks. These alternatives enable users to diversify their portfolios and potentially reduce risk by spreading investments across various asset classes.
Pros and Cons:
Pros: Stash offers a user-friendly platform, minimal fees, automatic investment features, and educational resources that make investing accessible for beginners. Additionally, it allows users to invest in various asset classes, providing diversification benefits.
Cons: Some potential drawbacks include limited investment options compared to other platforms and a lack of advanced research tools for more experienced investors. Additionally, Stash’s customer service may not be as responsive or comprehensive as larger financial institutions.
User Experience and Interface:
Stash’s user interface is sleek, modern, and easy to navigate. The app’s design prioritizes simplicity, making it a great option for individuals who are new to investing or prefer a straightforward investing experience.
Wealthfront: A Comprehensive Guide to Its Features and Performance
Wealthfront is a digital investment service that aims to simplify wealth management for individuals. By utilizing advanced algorithms and automated processes, it offers an efficient, cost-effective alternative to traditional investment firms. Let’s dive into the features of this popular app.
Description and Working Mechanism
Wealthfront is an automated investment management tool designed to optimize users’ investment portfolios. It uses modern portfolio theory and diversification strategies to create a globally-diversified, low-cost investment portfolio tailored to each user’s financial goals, risk tolerance, and time horizon. The app requires users to answer a few simple questions about their income, age, investment goals, and risk tolerance, which it then uses to build a personalized investment plan.
Investment Options Beyond Stocks
While stocks form the foundation of Wealthfront’s investment offerings, it also provides additional choices to cater to diverse investor preferences. Some of these features include:
- Asset Allocation: Wealthfront allows users to customize their asset allocation by choosing from predefined models or creating their own. This feature enables investors to invest in a mix of stocks, bonds, and cash based on their investment objectives and risk tolerance.
- Socially Responsible Investing: Wealthfront offers a socially responsible investing option, allowing users to invest in companies that align with their ethical values. This feature is ideal for those who prefer to support organizations and industries with positive social and environmental impact.
Pros and Cons of Using Wealthfront for Alternative Investments
Like every investment platform, Wealthfront has its advantages and disadvantages when it comes to alternative investments:
Pros:
- Automated portfolio optimization based on modern investment strategies
- Easily accessible socially responsible investing options
- Low fees compared to traditional investment firms
Cons:
- Limited selection of alternative investment options compared to specialized platforms
- Lack of personalized advice from financial advisors
User Experience and Interface Review
Wealthfront’s user interface is clean, intuitive, and visually appealing. The app’s design focuses on making the investment process as straightforward as possible for users. Key features include:
- Simple account setup and questionnaire to determine risk tolerance, goals, and investment objectives
- Customizable investment portfolios with various asset classes and allocation models
- Automated rebalancing to maintain the desired portfolio allocation
Betterment: Description, Features, & Functionality
Betterment is a digital investment advisor designed to help users build, manage, and grow their wealth through automated investment management. Launched in 2010, Betterment has been revolutionizing personal finance for over a decade. It offers an accessible, low-cost alternative to traditional investment firms, making it an attractive option for both novice and experienced investors.
How It Works:
Betterment’s automated investment management system is based on Modern Portfolio Theory (MPT). Users provide their financial information, risk tolerance, and goals to create a customized investment plan. The platform then automatically allocates assets across various diversified portfolios based on the investor’s risk preferences.
Investment Options:
While Betterment is primarily known for its stock offerings, it also provides access to a range of investment options. These include:
- Index funds:
- Exchange-Traded Funds (ETFs):
- Bonds:
- International stocks:
- Real Estate:
Betterment for Alternative Investments:
Betterment’s investment offerings extend beyond traditional stocks, but the platform’s automatic portfolio management is primarily focused on broad-market index funds and ETFs. Although users can manually add individual securities or alternative investments, Betterment’s automation may not optimally manage these assets.
Pros:
- Low fees
- Diversification through index funds and ETFs
- Tax-loss harvesting to optimize returns
Cons:
- Limited access to individual securities and alternative investments
- Lack of human interaction for complex investment situations
User Experience and Interface:
Betterment’s user interface is simple, intuitive, and easy to navigate. The platform provides clear information on investment performance, fees, and tax implications. Users can easily monitor their accounts, make deposits or withdrawals, and adjust their investment goals at any time.
Comparison and Contrast
Investing through mobile applications has become a popular trend in the digital age, providing users with easy access to various investment options. Let’s take a detailed look at how five leading investing apps compare when it comes to their investment options, fees, user experience, and customer service.
Robinhood: The Disruptor
- Investment options: Offers stocks, ETFs, options, and cryptocurrencies.
- Fees: Zero-commission trades but does make money through interest on uninvested cash and the sale of order flow.
- User experience: Intuitive and easy to use, especially for beginners.
- Customer service: Limited to email support only.
Robinhood differentiates itself by providing free trading and catering to a younger demographic of tech-savvy investors.
E*TRADE: The Traditionalist
- Investment options: Wide range of investment choices including stocks, options, ETFs, mutual funds, and bonds.
- Fees: Offers tiered pricing structure with lower fees for higher balances.
- User experience: User-friendly interface and robust research tools.
- Customer service: Offers phone, email, and chat support, as well as a dedicated account manager for higher-tier customers.
E*TRADE is known for its long-standing reputation and extensive offerings, targeting more experienced investors and larger account holders.
TD Ameritrade: The All-rounder
- Investment options: Provides access to various investment types like stocks, options, ETFs, mutual funds, and bonds.
- Fees: Has a tiered pricing structure with lower fees for higher balances but also offers commission-free ETFs.
- User experience: Offers a powerful trading platform with advanced tools and research features.
- Customer service: Provides phone, email, chat support, as well as educational resources and in-person branch access.
TD Ameritrade strikes a balance between catering to both beginner and experienced investors with its extensive offerings and personalized customer service.
Charles Schwab: The Premium
- Investment options: Offers stocks, bonds, ETFs, mutual funds, and options.
- Fees: Charges no commission for stock, ETF, and option trades but does have fees for mutual funds.
- User experience: Provides a user-friendly platform with advanced features and research tools.
- Customer service: Offers phone, email, chat support, as well as access to a dedicated team of investment professionals.
Charles Schwab stands out with its extensive resources, high-quality customer service, and commitment to providing a premium investing experience.
5. Webull: The Social Trader
- Investment options: Offers stocks, ETFs, options, and cryptocurrencies.
- Fees: Zero-commission trading but charges a fee for regulatory requirements when users sell shares that have been borrowed.
- User experience: User-friendly platform with real-time market data, advanced charting tools, and a community of active traders.
- Customer service: Offers email support with a focus on community engagement through social media and forums.
Webull specializes in providing an active trading environment and fostering a community of engaged traders, making it the go-to choice for those looking to connect with like-minded individuals.
Conclusion:
As we’ve explored in this article, the importance of diversifying your portfolio beyond stocks cannot be overstated. Stocks, while an essential part of a well-rounded investment strategy, are subject to market volatility and risk. By incorporating alternative investments, you can spread your risks and potentially enhance your returns. Now, let’s delve into the top 5 alternative investing apps that cater to various asset classes, allowing you to diversify effortlessly.
Robinhood:
Offering commission-free trading in stocks, ETFs, options, and cryptocurrencies, Robinhood is a popular choice for beginners. Its user-friendly interface and zero fees make it an attractive option for those looking to explore alternative investments.
Acorns:
Acorns is a micro-investing app that rounds up your everyday purchases to the nearest dollar and invests the spare change into stocks, bonds, ETFs, and other alternative investments.
Stash:
Stash offers a similar micro-investing approach as Acorns, with the added benefit of access to fractional shares. It also provides educational resources and personalized investment recommendations.
Wealthfront:
Wealthfront, an automated investment service, specializes in low-cost index funds and provides tax-loss harvesting to maximize returns for its clients. Although it doesn’t offer as many alternative investment options as the previous apps, it is an excellent choice for those looking for a passive investment strategy.
5. Ally Invest:
Ally Invest, a robust investment platform, offers commission-free trading for stocks and ETFs. Additionally, it provides access to options, mutual funds, bonds, and alternative investments like currencies, futures, and cryptocurrencies.
Embrace the Opportunity:
In conclusion, diversifying your investment portfolio beyond stocks offers numerous advantages. With a multitude of user-friendly alternative investing apps at your disposal, such as Robinhood, Acorns, Stash, Wealthfront, and Ally Invest, there’s no better time to start exploring these opportunities. Remember, the potential benefits can significantly impact your long-term investment strategy.
