When it comes to investment advice, most advice centers around the stock market or other forms of investment where, for the inexperienced investor, it can feel very much like you are allowing your hard earned money out into nowhere. You can watch and monitor the performance, but you cannot touch it or hold it.
The security of being able to engage with and physically have it in your grasp can make people feel a lot more secure, especially in a digital age, and one where traditional forms of investments, such as stocks and shares, are suffering.
Tangible assets can include anything from property to beautiful jewelry, gold bullion, or even something as simple as quality wooden table tops. Investing in this sort of asset is not always as easy as traditional investments, such as stocks, but if the portfolio is managed carefully and the market is continually analyzed, investors can expect some good returns in the longer run, with less risk. In fact, it is thought that tangible assets can perform better in the long term and so have taken on an important role for many people when planning their retirement or the future of their children.
Knowing which of these is best to spend your money on can be very tricky but here are some of the more popular choices that investors make.
Property and Land
For a long time, real estate has been one of the most popular and profitable tangible investments. All over the world, people make money from property, by buying land and selling it on to developers for a profit, renting out land and property and investing in companies that manage real estate. They can also be an excellent thing to have if you are thinking about retirement prospects or for your children’s financial future. Wherever you are, you can usually find a good market to put your money into, especially if you are prepared to look overseas.
Art, stamps and rare coins are just some of the more popular collections that are used for investment purposes, but there are plenty of others. We do advise in doing plenty of research beforehand to make sure that your collection is going to make you money. Toy collections can be profitable, if you choose wisely, but can also bring about risk. It also helps if you are passionate about what you are collecting, but not so much so that you can’t let it go when it is time,
Again, these are something that has been used as investments for many years due to their inherent value. They include gold, silver, and platinum. Platinum can be quite a volatile investment, so most people tend to spend their money on either gold or silver, both in bullion form, which can be measured in weight, or fine jewelry. Coins also hold their value and can be a collectible asset. Gold tends to keep its value even in periods of economic uncertainty and can be traded in quickly if the money is needed.
Fine wines have long been something that investors are attracted to, with many seeing yearly double-digit returns over the past five years or so. Thanks to its unique characteristics, it has been associated with low risk and high yield. Eastern Asian countries, such as China and Hong Kong have recently become very interested in wine as an investment, and, as a result, consumption and prices have rocketed, making it something well worth looking at.
Oil is one of the most sought after commodities in the world, and without it, many industries and countries would grind to a halt, which is why it is often referred to as ‘black gold.’ This can be one of the riskier, and for many, the ethical challenges that are associated with investing in oil can be offputting, but there is no doubt that there is a potential for a high-profit margin.
Why diversify your investment portfolio?
The financial crises of recent years have shown us that traditional stocks, shares, and bonds are no longer enough to protect investors from some potentially devastating losses. On top of that, if we push that risk aside, they may accomplish basic investment objectives, but there are other things out there to bring in a better return – these being cryptocurrency and tangible assets such as those that we have mentioned above.
Every experienced investor knows that diversifying their portfolio is of paramount importance, to protect them against risks and bring in higher returns. Rebalancing the portfolio regularly is one way of doing this. Essentially, this means watching, buying and selling various aspects of the portfolio to make sure that each asset is worth at least what it was initially. Increasing the collection regularly, rather than saving up cash and buying in one go is also advised, and so is knowing when to cut your losses. Investment is a long term game, and occasionally, you will make losses. Knowing when to get out is a skill that all investors should have under their belt.
Knowing which form of tangible asset to go for wholly depends on you and how hands on you want to be. They take more time and knowledge than traditional forms of investment, so if you don’t have the time, you may need to find a broker or an asset manager to keep an eye on it all for you. However, you may want to do it yourself, especially if you have a genuine interest in the asset. Building collections of antiques, wines, and art can be extremely satisfying and hobby like for many investors. You also need to consider how much of an appetite you have for risk. You will need to do your research to see how volatile that particular asset is and whether you are prepared to ride out any short term storms to get the pot of gold at the end of the rainbow.
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