With the U.S. stock market coming off of its worst quarter in four years, the S&P down 6.9% in Q3 and bond yields currently below 2%, it’s no surprise that today’s investors are looking for alternative investments to counter this market volatility. But what’s the best way to combat yet another quarter of uncertainty?
If the majority of your investments are in stocks or bonds, it’s time to diversify.
Investors may not readily consider commercial real estate to be the ultimate alternative, but real estate can and should play a role in every well-balanced portfolio of stocks, bonds and cash to serve as a critical diversification tool—especially during volatile times. If for example you had invested in Acquire Real Estate’s Randhurst Village—presently one of the largest commercial real estate crowdfunding opportunities in the U.S.—you would have netted 7-9% over the third quarter in the form of stable, non-fluctuating returns.
Sound too good to be true? While investors may know that real estate is an attractive asset class, they may not know that the rapidly growing real estate crowdfunding sector now gives them access to investments that were once only reserved for institutional investors. Acquire Real Estate in particular gives investors the opportunity to invest under the direction of commercial real estate veterans. They're also one of the only platforms in the industry to pre-fund, meaning they fully invest in a property themselves prior to offering it to their Members. This skin-in-the-game approach has been the cornerstone of their success.
While the most accessible avenue into commercial real estate has for long been REITs, their fee-intensive structure and overall stock market sensitivity make them far less attractive today. But by lowering your exposure to more volatile assets and focusing on returns that are more stable in the long-term—like commercial real estate—you’ll build the type of well-diversified portfolio that can weather most storms.
For today’s investors, the real advantage is through the diversification of your portfolio—and investors in commercial real estate are capitalizing on higher yields without the market volatility. With real estate crowdfunding, you’ll gain exposure to investments and regions far beyond your personal networks. From office and industrial to retail and multi-family, Acquire analyzes each deal—and invests in it themselves—before they ever offer it to their Members. That means you can diversify your portfolio with confidence, choosing pre-screened, high-quality properties that suit your own investment goals and appetite for risk. Whether it be in operating-cash-flow properties or simply long-term holdings, the more diverse your total investment portfolio is, the less risk you'll expose yourself to. This also means a greater likelihood of hitting your target returns and an even greater prospect of investing in something worthwhile.