Alternative Assests are a Diverse Marketplace
You’ve probably seen adverts in your social media timelines boasting of incredible whiskey investment profits. That’s because, similar to all tangible assets such as antiques, fine art, postage stamps and trading cards, there are examples of people making huge returns. Of course, the reality is a little different. To make life-changing sums of money, you need to be armed with a very good idea of what you’re buying, as well as a lot of luck.
For most people, tangible asset investments are a fun way to complement a hobby or passion. They’re not a way to get rich quick. In fact, those who have secured huge returns on whiskey have had to wait years or even decades for the profits to roll in. But, the popularity of whiskey investment is not necessarily down to potential future earnings. For fans of single malts and bourbons, it’s more about putting money into something they love.
The diverse market for alternative assets, which includes everything from commodities like gold and silver to autographs, historical documents, and even racehorses, is attractive because it’s far more accessible. When you’re dealing with hobbies like fine wine, classic cars and rare books, there’s an instant connection with the investor that does not exist when we’re talking about traditional financial investments like bonds and equities.
Tangible asset investment is an attractive hobby
For seasoned investors, alternative tangible assets offer the opportunity to diversify a portfolio, providing improved risk-adjusted returns. For novices or hobbyists, they can be a fascinating way to complement their affection for the things they love. Fine wine is one of the biggest growth markets. According to CNBC, over the last decade the price of fine wine has increased by 149% on average. That’s second only to whiskey.
Of course, the costs to invest in such assets are prohibitive to many. That’s why you can buy shares in commodities and collectibles like livestock and antiques. For example, racehorse ownership through a syndicate like RaceShare gives enthusiasts the opportunity to own shares in horses. Profits can be earned based on sporting success.
Similarly, whiskey lovers can purchase shares in casks that would otherwise be outside their budget. This market leads the way in tangible asset investments according to the Knight Frank Luxury Investment Index which tracks the prices of assets including art, cars, watches, and handbags.
Why are alternative investments in whiskey, wine and horses popular?
Alternative investments in things like whiskey, horses, fine wine and art are far more open book than traditional financial investments. Traditional financial investments may be particularly appealing to beginners for this reason. Yet, unlike the stock market, these alternative types are comparably immune to the price fluctuations and volatility we see as a result of largescale geopolitical events.
So whether you’re a veteran or a newbie, investing in alternative tangible assets has plenty of appeal. The connection investors have, particularly with assets that match their passions, feeds the market, making it an attractive option for those wanting to diversify their portfolio or escape traditional financial options.
