An Alternative to the Stock Markets and Why Look for One
There are many important advantages in stock market trading. When compared to some other financial instruments such as real estate, bonds and commodities, stocks are more liquid and in some cases even generate a higher growth in a shorter term. This degree of liquidity, however, also tends to make stock markets more volatile and vulnerable to external factors. For investors whose portfolios are strongly focused on stock markets, it is just as easy to experience an unbelievable growth as it is to have devastating losses. Due to this, portfolio diversification is one of the most important elements that investors need to take into account in order to minimize the risks that their investments inevitably carry. The question is not, however, whether portfolio diversity is necessary, but exactly how to diversify it and which instruments to prioritize.
Although real estate and commodities are not nearly as volatile as stock markets, they are very hard to liquidate, and are still subject to the movements and vicissitudes of their respective markets. In the case of commodities, there all manner of scenarios and conditions which can lead the price of a specific product to plunge, and when this happens it is often very hard for investors to get rid of it before seeing significant losses. Just a few months ago, for instance, the situation with oil became so critical that some companies were offering their product at a negative price. Real estate has also driven many investors to experience significant losses in a few noticeable historical instances, particularly with the 2008 bubble.
When it comes to stability and security, a lot of investors recur to bonds, as they are issued and backed by governments, and tend to pay fairly consistent and significant interest rates over long periods. However, they suffer from various disadvantages which ought to be considered. Firstly, they do not tend to be very liquid and although they can offer good returns in the long run, they’re not going to explode in value like some other types of investments can do under the right conditions. Secondly, governments are prone to arbitrarily changing the game rules, so those who choose to invest in bonds need to be very careful of assessing the countries in which they do business, their institutions and political and economic climates.
So, what exactly is a good alternative to stocks?
This might come as obvious for some and surprising for others, but the answer could rely in private equities. It seems almost counter-intuitive to invest on an instrument that tends to be riskier than other more orthodox types of investments, such as real estate, commodities and bonds. However, the current times are unusual, and thus require unusual alternatives. Although private equity investments tend to be risky, they’re relatively low in cost, and tend to yield very high returns when successful. Nevertheless, the answer to the question on where to find a good alternative to stocks does not rely in just any equity. In the current economic turmoil, it is particularly important for investors to identify exactly which types of startup businesses offer a real possibility for substantial growth and significant dividends.
We’re undoubtedly in the middle of a global economic crisis, perhaps the worst since the 1929 market crash. Under these conditions it is hard to find smart investment opportunities, but not by any means impossible. When it comes to finding a private equity to invest in, the question one should be asking is which types of services and products are going to be the most necessary and highly demanded given the current situation. Some might think of things such as medical services, delivery services, online shopping, online entertainment and whatnot. The answer, however, relies far beyond, in the very industry that holds all of these things together and allows them to function. That is, financial services, and more specifically financial technologies (FinTech).
Most investors today are looking for ways to grow their net worth, or even just preserve it to overcome the current crisis. However, the ones who will strive are those with the ability to think outside the box. The reason why FinTech is such a smart investment alternative, is because these companies aim to change the very way in which financial transactions are carried. Reducing transaction costs and increasing speed, efficiency and interconnectivity is always a good bet, and perhaps even more so when the global economy is steeply declining.
A FinTech Startup to Invest In
Although the FinTech industry is partially dominated by behemoths such as PayPal and Ayden, it is still very young and has plenty of room for innovation as well as a huge market. One of the most important advantages of this industry is that its companies often offer ingenious avenues and technologies for the investors themselves. One example of this is Konzortia Capital, a startup FinTech consortium composed by three companies, Novabank, InveStart and Capitalista. Each of these companies offers unique financial services, which are intended to change the very way in which financial transactions are carried, from banking and remittance to capital raising and trading.
What sets Konzortia Capital apart is its New Asset Class called Koura, which not only represents 99% of its equity, but also acts as the transactional currency for the operations between its companies. Novabank will offer unique banking and remittance services which will allow people make transferences in real time. InveStart allows startup companies to raise capital through a streamlined process and with no added costs. After the capital raising process for the small companies on InveStart is done, Capitalista will allow them to issue their own asset with similar properties to those of Koura, which can then be traded as a stock on an index called the New Asset Offering (NAO), intended to become the first truly global stock market. This will all be achieved through a private ledger technology which will allow all transactions to take place within a secure and decentralized ecosystem, with the advantages of a blockchain but without the security and stability issues of cryptocurrencies.
Perhaps the most interesting thing about Konzortia Capital is its clever business model. Customers will need to purchase Koura to access the services of InveStart, Novabank, and Capitalista, which means that its value should grow as more people utilize the platform. As a result, those who invest in Konzortia Capital now that the company’s shares are being sold through a private placement are expected to gain exponential growth. Furthermore, due to the unique properties of Koura, this private placement offers the inherent benefits of a private equity whilst also being as liquid as a traditional publicly traded stock. This liquidity also implies that, unlike most private equities, this investment offers a clear exit strategy. If you’re an investor wondering where to put your money to recover your net worth, and even surpass what you had before the crisis, the answer is here, it is called Konzortia Capital.