But you have many options to build your portfolio, including some lesser-known investments you might be overlooking. In some cases, you can even make investments related to your interests and passions. Here are five alternative investments to consider and the advantages of each.

Gold

Invest in gold if you want a highly liquid asset that's a hedge against inflation. It's a great way to diversify your portfolio because it's separate from other asset classes, such as stocks. During periods of economic volatility, the value of gold often increases as other assets decrease in worth.

If you want to invest in gold, you have several options. You can purchase physical gold assets, like coins or bars, through a reputable dealer. Gold jewelry is another tangible asset in which you can invest. The value of physical gold assets directly relates to the market price of gold. Additionally, you can invest indirectly in gold through sources like gold mining stocks.

Real Estate

Real estate may not be the first investment you consider to diversify your portfolio, but it can offer lucrative returns. Some people purchase duplexes, apartment complexes, or multi-family housing and then rent the property to tenants, collecting income each month. You can also invest in a vacation home in one of your favorite spots, such as in the mountains or on the water, and then rent it out for income when you're not using it.

Other people purchase property and then hold on to it for years until it appreciates to a level where they can sell it for a considerable profit. There are even crowdfunded real estate ventures, where you partner with other investors to purchase a property, without having to fund it entirely on your own. With so many possibilities, it's worth considering this investment as part of your portfolio.

Business Ownership

Business ownership can be a risky, yet highly profitable investment. While it costs time and money to start your own business, it can also provide significant returns if it succeeds. To mitigate the risks of business ownership, some people choose to invest some of their money in their business and the rest in other investments.

There are other ways to lower the financial risks of business ownership. You can choose a business with low startup and overhead costs, such as an online consulting business. You can also create a part-time business that you pursue after working in your 9-to-5 job. For example, you might open a small online store and work on the business in the evenings and on weekends. As your business grows, it can become a profitable investment in your portfolio.

Fixed Annuities

If you're looking toward retirement, a fixed annuity can be a great investment to add to your portfolio. With this investment, you earn a guaranteed return at a fixed rate over a set period of time. Since you know how much you'll earn based on the fixed interest rate, it's a lower-risk investment that can provide a steady source of income in your retirement.

When choosing a fixed annuity, consider factors like the fixed rate and the investment term. It's also important to review the insurer's rating since the company backs the annuity guarantee. You can speak with a financial adviser or use an online marketplace to compare fixed annuities so you can make the best choice for your portfolio.

Wine

Do you enjoy the thrill of the hunt? Investing in wine may be the right choice for you. While most wines don't make good long-term investments, some varieties appreciate value, especially with time. Some wineries make only a limited number of investment-grade wines, which helps them increase in value as people drink them and they become even rarer. Prestigious wine brands can also be a good investment, since they often produce wines with six-figure prices for a single bottle, according to Vinovest.

If you enjoy wine and want to pursue this investment, you can find bottles of investment-grade wine and then store them in a suitable environment. As they age, they'll likely appreciate it. At that point, you can sell them to another investor or an auction, wine stock exchange, or similar platform.

When you want to diversify your portfolio, it's worth looking beyond stocks and bonds to consider other options. Whether you choose to purchase gold, start your own business, or contribute to an annuity, there are countless investment options you can pursue to build your wealth.