The financial markets have experienced turmoil and shocks during the year 2015 which also affected the mainstream investors. Whichever way the investors react to the changing market environment means the fingers will still get burnt in the short term. Alternative investments include private equity, venture capital, hedge funds, investment trusts, real estate, rare coins, precious metals, art and wine. These assets perform well when there is a weak performance in stocks and bonds; they are also difficult to value and more liquid than traditional investments.
When the investors are worried about the stock markets for various reasons, they are forced to look for alternative investment options. For this reason, investors consider balancing their portfolio by adding different flavours, enhancing performance and reducing volatility. Gold is one type of alternative investment preferred during the bearish market because it is a tangible inflation hedge product, has a long-term store value and a liquid asset.
The traditional market investment products are controlled by a small group of elites commonly referred to as the one percent. They include insurance companies, large banks, and private equity firms. The role of these large firms is to act as the gatekeepers to determine who is to be included as an investor to access the retail, institutional and professional markets. However, the main problem is the complexity, lack of transparency and weak competition which makes it possible for the financial gatekeepers to exploit them to their advantage.
The good part is that the arrival of digitisation is set to minimise the current imbalance because it comes with new forms of transactions within the traditional finance and investment markets. Some of these technologies include the blockchain and cryptocurrencies which were made to improve the inefficient structures of the financial markets. The role of these technologies is to remove the role of gatekeepers to ensure the financial markets restore efficiency, greater transparency and higher returns in all forms of investments.
The digital currency bitcoin and blockchain have the potential of changing the structure of our entire financial system since the transactions can now be directly exchanged with better security and transparency. The main advantage of blockchain technology is its ability to make transactions faster, cheaper and more transparent. In the event of any discrepancy, blockchain enables the investor to disable the transactions. Unfortunately, the era of the middleman has not yet ended. The financial markets today are still managed by intermediaries such as banks and other institutions who also recognise the advantages of this new technology.
The blockchain technology is already being described as the game changer in the financial markets. The recent developments in the technology have changed the rules that were used by the traditional investment market. Blockchain has already made the online investment market more fluid and has become a powerful tool for enabling the smaller investments and trade volumes. The primary beneficiaries of the technology are secondary markets such as the equity crowdfunding and real estate investments. With the old system of investing, it is hard to invest because investments would attract high transaction costs.
There is no doubt blockchain technology is one of the best at the moment in the financial sector. It is highly associated with Bitcoin payments because Bitcoin is the most preferred way of payment by some financial services companies. The various ways an investor can invest in the blockchain boom but this depends on the amount of risk one is willing to incur as well as the type of yield they wish to achieve.
As many investors stockpile gold when the market is bearish, you have the alternative to stockpile Bitcoin instead because other investors choose to take advantage of the opportunity to stockpile Bitcoin. The two assets are very different because gold is tangible ad Bitcoin is not. However, it is important to know that many basic investment rules remain the same.
Blockchain Penny Stocks
It might surprise you, but there are penny stocks for the cryptocurrency. Many people and investors out there may recognise Bitcoin as the biggest digital currency, but it is certainly not the only one. Many of them aim to compete Bitcoin by focusing on the needs not yet fulfilled by Bitcoin.
Angel funding and startup ventures
It is not a new concept in the world of finance. However, one variation is that it has gained traction because of the new startups which have embraced the idea of blockchain technology. Businesses today using the Bitcoin payment have skyrocketed, and investors are taking advantage of the opportunity.
Lisa Patterson is an investment consultant. She enjoys finding innovative ways to add to her own portfolio and her articles focus on strategies that require less initial outlay.