Alternative investments are gaining steam among high net worth individuals and corporate investors alike. This is essentially the trading in commodities other than the obvious ones: Stocks, bonds, and real estate properties. However alternative investing is about more than simply collecting rare and expensive things. Underpinning the entire endeavor is the same market principles that drive these more traditional investment vehicles. No matter the commodity, buy-in pricing and return on investment are key indicators of a good or bad investment opportunity. The same things that regulate a stock buy also indicate a great opportunity in the vintage watch market. Here are a few things to keep in mind as you step into the world of alternative investments.
Leveraging
One of the great advantages of investing in alternative commodities is the ability to leverage their value to borrow for other opportunities. Building up a sizeable portfolio of gold bullion or classic cars can be leveraged more easily than large stock holdings in order to borrow for a new real estate project or mortgage loan for your own move into a new home. This is the principle of collateral. Collateral is your friend while expanding a portfolio of valuable assets.
High Value Vehicles
Classic and high end cars are always going to possess unique value as an investment. Cars models are produced yearly, meaning that there is a finite number of existing cars of any particular make. As years pass by these commodities dwindle, which is why many 1960s model Corvettes are rarer than say a 2002 build. Utilizing cars as an investment opportunity is a great way to secure a growing portfolio for the future as certain models increase in value with age. One great way to collect vehicles is through a car buying service. These tailor made companies offer a unique car buying experience that narrows the field down to exactly the model, year, and mileage that you are seeking without having to do the legwork yourself. It’s like having a personal assistant research the available stock for you. Of course you will need to identify the types of vehicles to target, but the service does the rest. They even deliver the perfect car to your door once you’ve picked one.
Collectibles
Anything collectible has potential value as an investment opportunity, From Beanie Babies to vintage stamps. Some of the more common objects of fascination are watches, guitars, manuscripts, and wine. Many old things are also valuable, but the trick is determining how many people will find value in an object. The more interest there is, the more value overall. A niche article will be harder to sell, but may fetch a much higher price when going to the right buyer. Finding your sweet spot with collectibles is difficult, but it pays handsomely.
Investment Platforms
An alternative investing platform like Yieldstreet is a great option for high net worth investors. This gives investors access to investment opportunities such as high value art, mortgage lending, or supply chain financing. These are the types of portfolio inclusions only seen among ultra-high value investors. While far more easily accessible to more mainstream investors with years of portfolio growth, Yieldstreet complaints often cite high buy-in prices that exclude novices who lack the advantage of prior portfolio growth to provide them the funding to invest. That being said, this means that the opportunities available to experienced investors are ones that you can make intelligent decisions on by only buying into things that make sense in your portfolio. Remember, no matter the commodity, the principles of yield and return on investment are always of primary importance.
Consider adding these alternatives to your portfolio to divest from the stock market as it becomes more volatile and unpredictable. Alternatives provide a safe haven during a bear market and can often be liquidated because there are always buyers interested in these types of commodities.
