The last couple of years have been equal parts rewarding and challenging for investors. Inflation has impacted just about every major market sector, and has taken a toll on consumers and businesses alike.

Although inflation has cooled significantly from its peak of 9.1% in June 2022, the current rate of 3.5% is still above the Federal Reserve's target range in the neighborhood of 2%.

Indeed, investors have still been able to generate strong returns over the last year or so. Artificial intelligence (AI) and new breakthroughs in weight-loss treatments have propelled surging interest in the technology and pharmaceutical industries.

However, there are several asset classes outside of the stock market that can profit during inflationary surges. While some of the investments explored in this article might appear counterintuitive, each represents a proven diversification strategy, and an alternative opportunity that can provide a useful hedge against inflation.

1. Private equity

Have you ever read about a company that makes an interesting or compelling product only to learn that you can't invest because it's still private?

Generally speaking, investing in private companies is off limits to most investors. Unless you meet income or net worth thresholds that qualify you as an accredited investor, your ability to invest in private businesses will be limited.

Nevertheless, if you are an accredited investor, you may have access to opportunities in private equity. Private equity firms raise money from a syndicate of high-net-worth individuals and invest that capital on their behalf.

Usually, private equity firms choose a theme for their funds and invest in start-ups that meet certain investment criteria. The idea is that you'll gain exposure to a variety of businesses before they pursue an initial public offering (IPO) or get acquired by a larger competitor.

Outside of being an accredited investor, you could also explore the Destiny Tech100 (DXYZ -1.52%) fund, which has positions in SpaceX, Stripe, Epic Games, and other leading start-ups

Private equity investments can be quite lucrative depending on how early you get an allocation. While there is substantial risk in investing in small, unproven businesses that are often led by first-time founders, the rewards can also be substantial.

A monthly budget outlined on a notepad

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2. Art and precious metals

Two other classes of alternative assets are fine art and precious metals. Now, unless you frequently attend galleries or trade shows, you're probably not going to be one of the people who finds the next big artist while they're still relatively unknown. The thing is, you don't have to do that in order to profit from art.

Just as there are blue-chip stocks, there are "blue-chip" names in the art and jewelry markets in particular. Some of the largest gains in these asset classes come from notable artists that many people will recognize and appreciate. Finding a needle in a haystack is not required.

For those of us without the cash to buy a whole Rothko or Picasso of our own, one way to invest in fine art is through a platform called Masterworks. Just like a private equity firm, Masterworks raises capital and then deploys these funds into its target market: fine art.

After acquiring a piece of art, Masterworks securitizes the asset, allowing investors to purchase fractional shares of the piece through its trading platform. Some artists featured on Masterworks include Jean Michel Basquiat, Banksy, Andy Warhol, and Keith Haring.

Precious metals can also provide a hedge against inflation. More specifically, certain coins or even watches are rare and can be worth a lot of money. The main reason for this is that mints and jewelry companies often discontinue producing certain items after a period of time.

Rally is a platform similar to Masterworks; however, investors have access to far more asset classes than just fine art. On Rally, you can buy fractional shares in old Rolex watches or coins from shipping expeditions in the 1800s.

3. Collectibles

Remember Beanie Babies? As someone who grew up in the 1990s, the quantity of them I received as gifts is startling. I recall family members telling me to hold onto the plush stuffed toys because "they could be worth something one day."

While I never personally profited from my Beanie Babies, the strategy that caused the toys to go viral is worth discussing.

Beanie Babies were made by a company called Ty, which took a creative approach to marketing its  stuffed animals. Namely, whenever a new Beanie Baby was released, Ty manufactured it in limited amounts and for a limited period before discontinuing production -- creating a sense of scarcity to entice consumers.

A great example of scarce collectibles is trading cards -- and I'd wager you have a few of those stored away in a closet, attic, or basement.

Sports cards, Pokémon cards, and Magic: The Gathering cards are some of the most highly sought-after collectibles. Moreover, given the variety of sets and collections among these brands, some trading cards are considered extremely valuable due to their rare natures and limited circulation.

For example, rookie cards for professional athletes tend to fetch generous sums. The reason is simple: You're only a rookie once, so by definition, there are only so many cards for a first-year athlete.

Just two years ago, a Mickey Mantle rookie card sold for over $12 million. The catch? The card was in mint condition. Considering the card is from 1952, it's astonishing someone was able to take such good care of it for so long.

In the trading card world, collectors can send their items to grading agencies. These businesses will preserve your cards in a plastic case (known as a slab) and assign a grade relative to the condition of the item.

To put the potential of collectibles into perspective, consider that over the last two years, eBay acquired a couple of marketplaces in the space. In 2022, eBay spent almost $300 million to acquire TCGplayer. And early this month, the company acquired leading auction house Goldin.

Given the themes from above, now may be a good time to dust off your storage bins in the attic. You might just be sitting on a pile of gold and not even know it.