Jasmine Birtles
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A Complete Beginner’s Guide to Alternative Investments in the UK 2025
George Sweeney
18th Jan 2025
With plenty of traditional investments and markets suffering right now, you might be considering alternative ways you can put your money to work. Whether that’s to protect it or grow it.
This guide is going to give you a complete overview of alternative investments. You’ll learn all about the different types, the risks involved, and how to actually invest.
Keep reading for the complete deep dive or click on a link below to jump straight to a specific section…
- What is an alternative investment?
- Why invest in alternative assets
- Types of alternative investments
- What is fractional ownership?
- How to invest in alternative investments
- Advantages and disadvantages
- Things to check first
- What else to be aware of
What is An Alternative Investment?
‘Alternative Investment’ is an umbrella term that refers to any type of asset that doesn’t fall within some of the more common categories you might already be familiar with.
The standard line-up of investments includes the likes of:
- Stocks and shares
- Bonds
- Cash
Alternative investments can include anything from designer handbags to art.
Typically, alternative investments are not traded on the traditional stock market. This means that the investing process looks slightly different.
Investing in alternative assets allows you to diversify your portfolio with investments that are not anchored to the stock market – which can be beneficial if the stock market dips!
Why Invest in Alternative Investments?
At times it feels like the financial world is collapsing all around us. And although, for the most part, things normally settle down – that’s not always the case.
There has been plenty of times throughout history when there’s been a changing of the world order. And I’m not talking about Illuminati conspiracies.
Countries, governments, and currencies can all fail. It’s happened time and time again. So, I think we’d be naive to assume we’re immune from this sort of thing.
You don’t have to start shoving cash under your mattress in waves of paranoia, because that might not even help anyway.
But, you might want to consider alternative ways to keep and invest some of your wealth.
Using ‘outside of the box’ investments gives you an added layer of diversification. And, something fun to research and talk about!
Popular Types of Alternative Investments
Certain investments that fall outside the category of ‘normal’ can be quite exciting, but others can be fairly dry.
One of the best ways to narrow down what sort of alternative investments might be worth your time, is by picking something that you have a genuine interest in.
Here’s a few examples of some traditional and unconventional alternative assets:
- Gold (and other commodities)
- Art
- Antiques
- Classic cars
- Watches
- Comic books
- Pokemon Cards
- NFTs (non-fungible tokens)
- Sports shoes
- Handbags
- Wine
- Whisky
- Autographs and memorabilia
This style of investing was often reserved for the super wealthy. Mostly because they were the only people who had access to, and relationships within, some of the high-end markets.
Nowadays with the democratisation of just about everything, it’s possible for ordinary people to become more involved in these spaces.
There are even plenty of opportunities cropping up around fractional ownership where you don’t even have to buy a whole investment piece.
How to Invest in Alternative Investments
Whether you choose art or another speciality area to invest your money, it’s worth taking some time to get to know the field. Some genuine curiosity will go a long way.
For example, if art is your chosen medium to explore:
- Visit local galleries
- Chat with experts (who are normally more than willing to chew your ear off)
- Check out websites like Artnet and Sotheby’s
- Buy a book on the subject, artist, or area you’re interested in
You can apply a similar approach to most alternative assets.
I’d suggest choosing something that at least piques your interest slightly. Otherwise, you’ll be bored out of your mind before even getting to the stage of investing!
As we mentioned above, alternative investments typically aren’t traded on the stock market. This means that you will have to go through a different type of broker to access them.
If you’re a beginner, one of the best ways to invest in alternative assets is to attend auctions (either online or in person). Stick to reputable providers that verify all of the assets that are for sale.
It’s also worth consulting with a professional to verify the value of an asset before putting any money on the line.
What Are The Advantages and Disadvantages of Alternative Investments?
Choosing more unusual investments can carry some pretty unique benefits:
- An extra way to diversify your investment portfolio
- Potentially very high rewards
- Possibly a good hedge against inflation
Of course, there are always two sides to every coin, the drawbacks include:
- They can be hard to sell if you don’t find the right buyer, making them illiquid
- Fewer regulations and rules in the markets
- Valuing items accurately can be tough
- Usually very long-term investments
- Higher risk of failure if you don’t know what you’re doing
Important Things to Consider Bore Investing in Alternative Assets
With these niche markets, it’s important that either:
- You have a genuine interest in the space, allowing you to make an educated investment.
- You know somebody, ideally someone you trust, who has knowledge or connections about a particular alternative investment.
This is because, with many of these investments, it can be the smallest details that make a difference.
For example, you don’t need a Fine Art degree to invest some of your money into artwork. But, some first or secondhand knowledge of the art industry will go a long way to making sure you make sensible investments.
The other thing is, having some interest in the asset means you might buy an alternative investment just for the joy of owning it. And, if the price appreciates, that’s a bonus.
What Are The Risks of Alternative Investments?
Unlike most traditional markets or investments, these unconventional spaces are largely unregulated.
This means there are very few protections in place to guarantee your ownership. In plenty of cases you have to navigate around frauds, scammers, idiots, and those generally looking to take advantage.
Unfortunately, nefarious behaviour takes place in just about every industry. If there’s a way to try and con people out of money, someone will be plotting.
That doesn’t mean you should stay away completely. Just be sure to take plenty of time to research and check something out before handing over any of your money.
And, always be aware of the unconventional risks that come along with unconventional investments.
This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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