Markets In Turmoil? S&P 500 Plunges Over 4%, But These Alternative Investments Give You Exposure To Assets Other Than Stocks

Wall Street took a beating on Monday as fears of a looming U.S. recession triggered a global market sell-off. The S&P 500 plummeted over 4% in its worst single-day drop since the early days of the pandemic.

The market rout, which saw Japan’s Nikkei 225 suffer its steepest decline since the Black Monday crash in October 1987, may have investors scrambling for safe havens and alternative assets to hedge against further volatility.

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The tech-heavy Nasdaq tumbled 3.1%. Megacap tech stocks, which have been market darlings recently, bore the brunt of the sell-off. Nvidia, a key player in the artificial intelligence boom, nose-dived 6.5%, while Apple shares sank more than 4% after Warren Buffett’s Berkshire Hathaway halved its stake.

The July jobs report on Friday stoked recession fears, leading some to believe that the Federal Reserve may be late in cutting interest rates to bolster a slowing economy. The central bank opted to keep rates at a two-decade high last week, a move that’s now under scrutiny as market turmoil unfolds.

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Some investors may turn to alternative assets as potential safe harbors as traditional equities falter. The art market, for instance, has shown resilience during past economic downturns. Masterworks, a platform that allows individuals to invest in blue-chip artworks, has seen increased interest from those seeking to diversify their portfolios.

Real estate, another traditional hedge against stock market volatility, is also attracting attention. Arrived, a real estate investment platform, offers exposure to private real estate with targeted annual cash dividends of 7-9%. 

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For those bullish on specific urban markets, Cityfunds provides a novel approach. The platform allows investors to own real estate in high-growth cities like Miami, which has seen an influx of financial firms and tech entrepreneurs. 

As the market grapples with uncertainty, the appeal of pre-IPO investments in potential future tech giants is also growing. The Fundrise Innovation Fund focuses on AI and machine learning startups and aims to give retail investors access to ventures that might become the next Nvidia. 

Chicago Fed President Austan Goolsbee hinted at potential policy shifts if economic conditions deteriorate further. Investors will watch upcoming economic data and Fed communications for clues on the market’s next moves.

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Aj Fabino is an Economy and finance journalist. With experience covering complex financial topics and engaging with high-profile individuals and companies, he brings a unique perspective to his writing. He has a Bachelor of Science in Business Administration from Northern Illinois University. Aj's articles are for informational purposes only and do not constitute investment advice or any investment service.