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We all witnessed the stock market’s volatility in 2022, as soaring inflation led to aggressive rate hikes over the course of the year. Many stocks plummeted, with investors selling off their shares due to concerns about a possible recession. Those fears have many investors concerned about where to invest their money in 2023.
We all witnessed the stock market’s volatility in 2022, as soaring inflation led to aggressive rate hikes over the course of the year. Many stocks plummeted, with investors selling off their shares due to concerns about a possible recession. Those fears have many investors concerned about where to invest their money in 2023.
If you’re tired of watching your stock investments drop in value and are looking for a way to diversify, you may want to consider alternative investments. One way to do that is through Yieldstreet.
Yieldstreet is an online platform that provides individual investors access to alternative investments. For decades, private alternative investments have been limited to institutions and ultra-wealthy investors.
Now you can diversify with offerings in art, private equity, shipping vessels, and crypto with just $2,500.
But are these alternatives safe solutions for your portfolio?
This Yieldstreet review will dive deep into how it works, pros and cons, and the costs to help you make the best decision.
What Is Yieldstreet?
Yieldstreet is an alternative investment platform for people looking to diversify beyond mainstream investments, like stocks and bonds. Yieldstreet investments vary from artwork to multi-family real estate properties.
Yieldstreet is ideal for sophisticated investors willing to take on riskier projects they can’t find elsewhere, with the potential for higher returns. With over 400,000 investors, Yieldstreet’s platform is unique for its alternative investment vehicles. Because the platform holds various assets – real estate, cryptocurrencies, artwork, and more – the average user holds about seven investments.
You can build a custom Yieldstreet portfolio starting at $10,000 across various asset classes as an accredited investor.
There is also an option for non-accredited investors to get involved by investing a minimum of $2,500 in Yieldstreet’s Prism Fund. The fund allocates the money towards art, commercial property, consumer, legal, and corporate asset classes.
Yieldstreet’s Key Numbers
Annual Fees: Yieldstreet fees range from 0%-2.5% annually. Additional fees may apply depending on the fund. The Yieldstreet Prism Fund has a total annual fee of 1.5% and charges no load or redemption fees.
Minimum Investment: Individual offering minimums range between $10,000-$50,000 (accredited investors). The Prism Fund and other short-term notes start at $2,500-$5,000 (non-accredited investors).
Projected Returns: Targeted annual net returns range from 8%-20% and are stated on the fund offering page. Actual results may vary.
Investment Time Length: Terms range from 6 months to 5 years.
Asset Classes: Art, crypto, legal, multi-asset, private credit, private equity, real estate, short-term notes, transportation, venture capital
Investor Requirements: Most offerings are available to accredited investors – individuals with an earned income of $200,000 annually or a net worth over $1 million. The Yieldstreet Prism Fund is open to non-accredited investors.
Who’s this best for?
Yieldstreet is ideal for accredited investors who want to diversify their portfolios through alternative investments. Non-accredited investors are also accommodated on the platform through the Prism Fund, however, it’s important to make sure that you have already exhausted other traditional investment accounts first.
Because you might need to lock up your cash for potentially long periods of time, you’ll want to be relatively stable in your current financial situation. It’s important that before you get into alternative investments, you should have a fully funded emergency fund, be contributing at least enough to receive the employer match for your 401(k), contributing to a Roth IRA and have a cushion of extra savings on the side.
It may be worth considering using a robo-advisor, like Wealthfront or Betterment, to invest your money before you start purchasing alternative investments. The platforms will create a diversified portfolio of ETFs for you based on your risk tolerance and investment time horizon.
Another crucial thing to keep in mind is to ensure less than 10% of your portfolio is composed of alternative investments like the ones offered by Yieldstreet. This way, you keep a diversified balance of all your assets.
Key Features of Yieldstreet
| Minimum investment | $2,500 for the Prism Fund. $10,000 for all other investment options. |
| Management fees | 1.5% for the Prism Fund. 0% to 2.5% management fee for other investments. |
| Customer service options | Live chat or email [email protected]. |
| Mobile app availability | iOS and Android |
| Promotions | None are available at this time. |
Pros (Benefits) of Yieldstreet
Yieldstreet provides accredited and non-accedited investors access to a wide array of private alternative investments.
Yieldstreet offers more asset classes than any other platform, including real estate, crypto, transportation, venture capital, short term notes, art, private equity, structured notes, private credit, and diversified funds.
Can you make money with Yieldstreet? This is another reason I like the platform. Private market investments offer potentially higher returns given their limited availability. Targeted annual net returns range from 8%-20%.
Yieldstreet’s IRAs give investors access to the unique opportunity to hold private investments within a tax-efficient retirement account. Most large traditional brokerage firms do not allow privately held investments.
Yieldstreet also prides itself on its transparency. You can view historical performance since inception for each asset class. Out of the billions of dollars in opportunities submitted to Yieldstreet, only 9% make it to investors. Their 30+ person investment team has a four-step vetting process to approve offerings.
Cons (Drawbacks) of Yieldstreet
The primary drawbacks of Yieldstreet are accessibility and liquidity.
Most Yieldstreet offerings are only available to accredited investors. That said, the Yieldstreet Prism Fund was launched for non-accredited investors and charges a 1.5% annual fee. The fund has a $5,000 minimum and invests across multiple of Yieldstreet’s most popular asset classes.
If you’re looking for liquidity, Yieldstreet may not be right for you. The accredited investor offerings range from 6 month to 5 year terms. Again, the Yieldstreet Prism Fund allows investors the opportunity to liquidate at least a portion of their shares on a quarterly basis.
Another main drawback is the limited amount of offerings. Not only are most available to accredited investors, but they are only open for a limited time. You could be ready to invest and find out the fund you’re interested in is already closed.
Final Word: Yieldstreet Review
Final Word: Yieldstreet Review
Most professional investment managers recommend supplementing your portfolio of stocks and bonds with private market alternatives. Yieldstreet offers more asset classes than any other platform.
On Yieldstreet, you’re investing in:
- A track record of strong returns
- Investments from managers with $500 billion in assets under management
- Deals analyzed by 30+ investment professionals
It may be slightly more expensive than a few other platforms (Yieldstreet fees are slightly higher than Fundrise’s), but, at least in this instance, you get what you pay for.