Value Nomad

September 30, 2020

Alternatives to the Stock Market Post Coronavirus

Nervous about your stock portfolio? Let’s look at a few stock market alternatives post coronavirus.

Fact: The new coronavirus continues to disrupt and impact businesses worldwide. This makes for a perfect time to find stock market alternatives post coronavirus.

stock market alternatives post coronavirus

Fact: The stock market has experienced some of the worst declines since the 2008 financial crisis. The week ending on 28th February was one of the worst, with major indexes dropping by more than 10%.

The record has now been shattered in the first weeks of March, with the indices tanking further.

Unfortunately, it’s just the beginning. Fears of the virus and the expected fallout continues to disrupt supply chains, keep customers at bay, occasion product shortages, and roil financial markets.

Given this turbulence, is it still worth it to keep invested in the market, or is it time to look at potential alternative investments? Below, we’ll look at some of the other places that might be a better bet for your money.

Best Stock Market Alternatives

Advice from the Oracle of Omaha, Warren Buffett, goes something like this: When others are fearful, it’s time to get greedy. And vice versa.

The fear index is at an all-time high right now. However, that doesn’t mean that you should go on a buying spree. Look at the bigger picture, too, and how the novel Coronavirus might affect the future of business.

While doing that, here are some worthy alternatives that could, potentially, form part of your investments moving forward. In a state of uncertainty, as we’re in right now, it doesn’t hurt to diversify.

Peer-to-peer lending

Peer-to-peer lending gained popularity during the last financial crisis in 2018. Banks at the time were no longer lending to small businesses and individuals, prompting them to look for alternatives.

Since then, peer lending has grown significantly. It hit a market value of $34.16B in 2018 and expected to reach $589.05B by 2025.

As such, the industry offers unparalleled potential for investors looking at alternatives for the stock market.

P2P lending offers a sort of middle-ground between the volatile stock market, and the zero-risk alternative of cash assets. You’ll enjoy a better rate of return while keeping your money away from the Coronavirus-worried market.

For the maximum growth, you’ll need to keep invested for at least three years. Just like the stock market, a long term horizon will yield the best results.

Crypto lending

While Cryptocurrencies have not been spared by Coronavirus fears (Bitcoin has shed more than 25% in value), the attendant crypto lending space might provide some value and relief.

Crypto lending involves advancing crypto-currency denominated loans to borrowers. Doing so provides liquidity to owners of crypto-assets, plus income in the form of interest. It also gives much-needed funding to borrowers.

Alternatively, you can use platforms like CoinLoan, to get a line of credit using your crypto-assets as collateral. You can then use the funds to invest in other more promising areas.

Final Thoughts

Treat this period of uncertainty to review your portfolio and consider whether your money could be better deployed in other areas. Diversification, in the stock market, and alternative investments, might just help you weather the storm and come out a winner, or at least unscathed.

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