Top Alternative Investments Trends for 2024

Yieldstreet staff

March 1, 2024

Interest in alternative investments has seen tremendous growth in recent years thanks to their potential for portfolio diversification and ability to generate yields exceeding traditional stocks and bonds. As the past few years have demonstrated, alternatives can provide some insulation against the volatility that rocked public markets.

In 2023, flows into private capital strategies like private equity hit new records, real assets delivered steady income, and new options emerged for retail investors seeking alternatives exposure.

What Are Alternative Investments?

In the broadest sense, alternative investments are anything other than stocks and bonds, arbitrage, long and short selling and the like. Today alternative investments typically involve private assets such as private equity, private credit, infrastructure and private real estate

The nature of these types of investments has traditionally restricted them to the ultra wealthy and institutions because they are unregulated by the SEC. However, these investment opportunities are now being made available to retail investors, who can also benefit from the profit potential.

The Top Alternative Trends for 2024

As we look into 2024, here are some key trends and projections that I’m watching in alternatives.

Real Estate Investing

Real estate investors in 2024 may see potential opportunities amidst interest rate uncertainty. Some analysts see a strategic pivot towards undervalued and distressed properties, as investors seek higher returns to offset risks from interest rate volatility. There also continues to be record low housing supply, providing opportunities in residential.

Additionally, sectors tied to technological advancements, like data centers, are expected to outperform. Surging demand for data processing capacity and innovations in IoT and AI (expected to grow 10% annually) may fuel transformative sector growth.

Lastly, platforms that increase real estate investment accessibility, like Yieldstreet, could substantially impact 2024. In such a dynamic landscape, agility and prudent evaluation of both risks and opportunities will be key. Investors able to balance the two, while leveraging technology and alternative platforms, may successfully navigate 2024’s shifting tides.

Cryptocurrency Investing

Cryptocurrency markets should continue maturing in 2024, driven by increased mainstream adoption and an influx of regulatory oversight. Investor interest may rise significantly with the SEC approving a spot Bitcoin exchange-traded fund (ETF), allowing exposure without direct crypto ownership. ETF issuance could spur prices upwards based on some projections. However, policy timelines remain uncertain, and intensifying regulatory scrutiny carries both benefits and drawbacks.

As speculatory manias give way to sustainable growth, investor emphasis is shifting to functional cryptocurrencies powering real-world decentralized applications, instead of assets valued purely according to hype-driven pricing.

Art Investing

In 2023, the art market showed resilience and growth, with high-net-worth (HNW) collectors continuing to spend strongly. Global art sales hit $65 billion in 2023, outperforming 2019 and showing resilience despite a 4% year-over-year drop.

The market saw a notable increase in spending from Mainland China post-lockdown and a resurgence in in-person buying. However, there was a shift in collector behavior, with a trend towards more risk-averse collecting compared to the previous year. This was evidenced by increased spending on paintings and a decrease in digital art purchases.

Looking ahead to the election year in 2024, the art market faces challenges from economic volatility and geopolitical unrest, while also showing signs of resilience and adaptation. The strength of the secondary market, interest in affordable artworks, technological integration, and shifts in collecting and curatorial practices are key trends shaping the future of this growing segment.

Private Equity

In 2024, the private equity (PE) sector is experiencing significant changes driven by technological advancements, evolving market conditions, and shifting investor expectations. PE firms are increasingly adopting artificial intelligence (AI) and digital tools to enhance decision-making processes, operational efficiencies, and value creation in their portfolio companies. The focus on infrastructure investments, particularly in energy projects, reflects the sector's commitment to sustainable and resilient economic growth.

The competitive landscape is intensifying, with heightened demand for yield leading to more creative and flexible deal structures. PE firms are also placing a growing emphasis on environmental, social, and governance (ESG) considerations in their investment decisions. Additionally, emerging markets are attracting more attention from PE investors seeking diversification and higher growth rates. The sector's adaptability is further highlighted by its response to the evolving financing landscape and the need to generate sustainable returns while addressing broader economic, societal, and environmental challenges.

Private Market Portfolio with Yieldsteet

Discover the power of diversified investing with Yieldstreet and build a robust portfolio beyond traditional stocks and bonds. With over $3.9B invested and a community of 450,000+ members, Yieldstreet stands out with the widest range of alternative assets. From art to venture capital, our highly-vetted investments are handpicked by experts, ensuring quality and diversity. Join us for access to elite strategies and a proven track record of strong returns, guided by our seasoned investment team. Yieldstreet is your key to a modern, resilient portfolio.

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We believe our 10 alternative asset classes, track record across 470+ investments, third party reviews, and history of innovation makes Yieldstreet “The leading platform for private market investing,” as compared to other private market investment platforms.

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