What are alternative investments and should you explore them for passive income?

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In uncertain times like Covid-19, most people have come to realise the importance of having a passive income. This has increased the importance of investments and having a well-diversified and sound financial portfolio. Now, over the last few years, several new alternative investment avenues like REITs, peer-to-peer lending, cryptocurrency etc. have emerged which have also yielded higher returns but should you invest in them over proven asset classes like mutual funds or direct equities? Mrin Agarwal of Finsafe spoke to Money9 to discuss the pros and cons.

“Before making any investment, it is very important to assess one’s investment appetite and risk profile. A balanced portfolio which is backed by well informed decisions can help a lot in wealth creation in the long run”, she said.

She also said that not every avenue yielding higher returns is recommended. One needs to be aware when one chooses Peer-to-Peer lending that it is extremely risky and investors can even lose all money here. Similarly, she said that cryptocurrency is not regulated so one should wait for clarity from the government before taking a plunge.