This post is sponsored by Percent. All opinions are my own.
As you grow as an investor and look for new ways to put your money to work, you may want to look beyond the stock market.
While I personally love investing in index funds that hold various stocks and bonds, I’ve also started dabbling with investments that have low correlation to the stock market.
This is a great idea to ensure you are diversified, especially during wild market swings which can sometimes devastate your portfolio. Even if you are investing for the long haul, you’ll still want to explore alternative investments.
A great way to dabble in alternative investments with solid returns is with a platform called Percent. They are a bit new in the investment space, but already making some industry noise with their zero-fee investments.
Interested? Read my Percent review below to learn more and how you can get started investing today.
Table of Contents
What Are Alternative Investments?
Before I go any further, it’s important that you understand what alternative investments are and why they can be a good idea.
Alternative Investments Definition:
Alternative investments are financial assets that are not part of the traditional investment categories, like stocks, bonds, and cash. This can include real estate, art, wine, commodities, private equity, loans, etc.
These investments are great ways to not only diversify your assets, but offer different ways to build your wealth and even generational wealth.
Many people rely solely on the stock market, which is a great place to invest — but we all know the market can have wild swings.
By investing in alternatives, you have ways to better balance your portfolio and have assets that don’t traditionally correlate with what the stock market is doing.
How to invest in alternative investments
While getting access to some of these alternative investments has been challenging in the past, numerous investment companies have been started that now make alternative investing more accessible.
Many of these platforms have been a game-changer for investors, who can quickly create an account and get access to various assets. One of those platforms is the New York-based company called Percent.
In the next section, I’ll share more about what Percent is, how it works, and some pros and cons.
What Is Percent?
With many alternative investing platforms out there, why is Percent worth taking a look at?
Well, the company allows investors to access types of investments that historically have not been very accessible: short-term debt investments with competitive risk-adjusted returns. These investments can be in the form of working capital assets, business financing, shipping invoices, etc.
For the typical investments available through Percent, the terms run 1- 6 months, and return rates are projected on average from 10%-15%+. Now sometimes it might be a bit lower or higher, but the rate of returns is very solid.
Then after the maturity date is reached, you are then paid or you can invest in the next opportunity that interests you.
And on top of that, there are zero fees for investors! That is typically unheard of when it comes to investing institutions. You might be wondering how that is possible, but I’ll explain further later in the next sections.
Before I dive in further with Percent, it’s important to note you’ll need to be an accredited investor at this time to invest. To qualify, you’ll need to meet this criteria:
- Have an annual income exceeding $200,000 ($300,000 for joint income) for the last two years and the expectation of earning the same or higher in the current year.
- Net worth exceeding $1 million, either individually or jointly.
How Does Percent Work?
Thanks to technology and evolving SEC regulations, access to alternative investments does not have to be super challenging. And what I like about Percent is getting started with their platform as an accredited investor is super easy.
First, if you are interested in Percent you’ll want to sign up for a free account. This allows you to gain access to exclusive investment opportunities, which aren’t listed publicly on the site or elsewhere.
Once your account is set up, you can see a full-list of their Originators, these are their partners that offer unique investment opportunities to you.
You can see a few of their current partners here, which has an overview of each one, the deals funded, and the amount of interest paid back to investors.
After reviewing the Originators, you can start sourcing investments you find interesting. Every investment opportunity will include important information to help you make a decision like:
- The overall investment objective
- What the minimum investment is
- The projected APY (expect return)
- Close date and term length
- Further details, any risks, etc.
Once you start investing, you’ll receive digital proof of ownership and can track your progress and where the loan maturity is at currently.
Percent investor protection
One key consideration for investors is knowing that there are strong risk measures in place and that their money is protected. While there is always risk with investing, the financial institutions you choose should have their investors best interest in mind.
Here’s some important aspects Percent offers investors:
- Detailed analyzing of the creditworthiness of investments
- Mirroring of institutional underwriting standards
- structure investment opportunities with the objective of protecting your principle
- Dutch auctions, a price discovery process. Read more here.
- Use of blockchain technology for extra investment security
And if Percent enters financial strain, where the company is at risk:
“We set up an industry-standard layer of protection through Special Purpose Vehicles (SPVs). These SPVs are bankruptcy-remote legal entities that are solely created to service every investment on our platform. If Percent were forced to suspend its operations, a third-party administrator will be automatically established to continue servicing your investment until the opportunity matures and your principal and distributions are paid.”.
Pros and Cons of Percent
Now that you have a good overview of how Percent works and the investment types, let’s look at the pros and cons of the platform.
Pros of Percent:
Every savvy investor should be interested in portfolio diversification. With Percent, you minimize your exposure to only stocks and bonds, plus put your money to work in a completely different way.
Strong Rates of Return
One of the main factors in deciding where to invest is the potential rate of return you can get on your money. Percent offers some strong historical return rates on their investments. Many average 10%+ and do not require years to obtain those results.
Low Minimum Investment
Typically with alternative investments, it will require a more substantial minimum investment. But Percent allows investors to get started with as low as $500, which lets you not risk as much right from the start.
For many investments, seeing your returns can take years. While the buy and hold strategy is a great option, investments on Percent take a lot less time. Many of the terms for any deals are 6 months to 1 year, but you can find deals that are only a month-long too!
Low Correlation to the Stock Market
I’ve mentioned this earlier in the article, but investing in Percent has a lower correlation to the stock market. Of course, if there is a total marketing collapse your alternative investments can still see some impact. But generally, alternative investments do not typically follow stock market movements.
Zero Fees to the investor
Oh yes, you read that right! Percent does not take fees or any part of your investment returns. Of course, the company still needs to make money to operate. So how does Percent make money? Instead, they charge a fee to the Originators who want to list their assets for investing.
Full Transparency of Investments
Blindly investing money is never a good idea and Percent understands that. With the type of alternative investments they offer, it’s important they cover as much information as possible.
This transparency helps investors trust them, but also make better decisions. You’ll get tons of data, insights about the Originators, what your investment is powering, returns, etc.
Ready to get started with Percent? Sign-up for your free account and start investing.
Cons of Percent
Currently, there are not many cons to Percent, as the investment platform is doing a great job for its investors. However, no platform is perfect and especially a newer one to the scene.
Only for Accredited Investors
The main drawback to Percent right now is that it is only open to accredited investors currently. Even with the low minimum entry, it limits who will be able to invest with them. However, this is quite common with alternative investments as there can be more risk.
History of Results is Short
The rate of returns and the interest paid is pretty impressive so far with Percent, however the company was founded just a short time ago (2018).
Although they have a low default rate of under 2% and paid over $3 million in interest, the history of how well these results will be sustainable is undetermined.
Who Should Invest with Percent?
Now that you got the full Percent review, you might want to know if this is the right platform for you to invest with.
- You’re an accredited investor. Percent is currently only open to accredited investors, so if you fit the criteria then this can be a great alternative investment option for you.
- You want more diversity and exposure to different assets. If you want to go beyond stocks, bonds, and real estate, then the investments from Percent can be very intriguing for you.
- Looking for short-term investments with great returns. While long-term investing can be great (especially if you are playing the dividend game), you might want strong returns in less time. With Percent, your money is invested in much less time for potentially much higher interest than traditional investments.
Percent is onto something great here for the alternative investing space. They provide full transparency, investor protection, and a user-friendly platform that makes it easy to get started. Plus, you got to love the short-term investors with very strong returns.
Ready to get started? Check out Percent’s website and sign-up when ready!