3 Alternative Investments for The Offbeat Investors
Stocks, bonds, property, hedge funds. Got them all? If you’re looking to add a little more spice to your investment portfolio, perhaps it’s time to look at some alternative investments. An alternative investment is essentially not any one of the three traditional asset types (cash, bonds, stocks). Alternative investments cover a wide range of products, many of which are tangible, and can be more resistant to ups and downs of the economy.
Here are some offbeat investment ideas that, if all else fails, give you some pleasure, something that stocks can hardly do.
People have been collecting luxury watches since the beginning of …luxury watches. While some collectors are aficionados who don’t see their precious timepieces as investments, you may turn your passion for luxury watches into a profitable one.
There are some things to keep in mind when investing in luxury watches
- Liquidity – Watches are not exactly liquid investments. Finding a buyer at the right price may take some time, depending on how sought-after and well known your timepiece is.
- Rarity – If you have the budget for it, go for limited editions, or vintage watches. These have the highest possibility of fetching you a premium.
- Brands – You can’t expect to buy a Swatch, even a limited edition one, and expect it to hold much value. Some of the best investment-grade brands include Patek Philippe, Audemars Piguet, Rolex, Cartier, and Vacheron Constantin.
You may want to check out interesting funds like The Watch Fund that also allows you to wear your investments and feel good about yourself.
Art is primarily an aesthetic investment, due to its subjectivity, and less of a financial one. So when it comes to buying art, don’t purchase a piece that you hate looking at just because you think it will rise in value over time.
If you’re already interested in art, but haven’t considered them as possible investments, here are some things you can do as homework before take the piece off the wall. Art is incredibly diverse, which means that you may not need a high amount of capital to enter. If you spot works by emerging artists that you personally enjoy, investing in your aesthetic satisfaction may very well fetch you financial rewards if you decide to part with it.
Remember though, that your cherished art piece may not be sold so quickly and is probably more illiquid than luxury timepieces.
- Do your field visits – Visit both art galleries and art museums. Art galleries can tell you what’s happening in the world of art and you may get some on-the-ground insights into the business aspects of art.
- Art publications – Find out about the trends in the art market by reading periodicals that focus on the art world. For example, ARTnews is a widely circulated global art magazine read by collectors and curators.
- Arts Fairs – Singapore has its very own art fairs. Visit events like the Art Stage Singapore (www.artstagesingapore.com) or the Affordable Art Fair Singapore (www.affordableartfair.sg) to get to a good overview of regional and international artists and their works, and to make contacts.
Fine wines age well, and so do their value. One of the best perks about investing in wines is that in the very worst-case scenario, you can always open the bottle for your birthday and congratulate yourself for making the best-failed investment ever.
If you intend to invest in wines and own the physical bottles, here are some things that you need to know:
- Holding power – Buy very high-quality bottles that are known to be investment-grade, such as old world wines from the main châteaux of Bordeaux, Bugundy, or the SuperTuscans. Generally speaking, most investors often wait for five or more years before selling them.
- Professional Storage– Poor storage of wine can turn your precious bottle undrinkable, and unsellable. Storing wine in an insured temperature controlled facility will ensure that your wines age well, and also prevent tragic mishaps of a friend “accidentally” opening the bottles at a dinner party.
- Valuation– The value of wine can be affected by what established wine critics think of it. Before you buy a bottle based on the recommendations of an enthusiastic salesman, be sure to check the ratings of the wine from online wine databases, like WineOwners.com
If you don’t want the work of getting hold of hard-to-get wines and deal with storage, you may choose to go with a wine investment company. There are a couple in Singapore, such as Equity Wine Investments, and Profiters International.
Investing in something that you have an interest in adds a whole new dimension to the investment process-pleasure. But as with all investments, a good amount of hard work and patience is necessary.