Alternative Investments can Offer High Returns

“Beauty is in the eye of the beholder”.

Well, with the right beholder then, a piece of fine art- or any rare collectible for that matter- could sky rocket in value.

In fact, the collectibles industry is set to grow 22% anually over the next 10 years, according to this report by Globe Newswire.

Keep reading for our take on rare collectibles and a couple promising choices to get started.

Are Collectibles a Good Investment?

Investing in collectibles is a great way to diversify your portfolio with the added benefit of owning an asset with emotional significance (if you happen to have an Ernie Banks rookie card we will pay top dollar!)

With the market for global collectibles projected to surge over the next decade, we wanted to put together a couple options for you to get started:

Fine Art Surged in 2022

Last year, while the S&P 500 dropped 7%, the Knight Frank Luxury Investment Index grew by 16% – with its art assets leading the way with 29% growth!

This type of inverse relationship with stocks isn’t a concrete law, but it’s a great example of the type of hedging fine art can provide to a traditional stock portfolio.

Fine Wines Have Shown Steady Appreciation

The French Bordeaux in your cellar can enhance your next steak dinner, but it can also boost your portfolio.

The Liv-Ex Fine Wine 100 index – an index tracking the prices of the world’s finest wines – has risen by nearly 34% over the last 5 years.

While these types of indices aren’t publicly listed, they’re a great barometer for an asset’s appreciation over time. 

Illiquidity of Rare Collectibles

We wouldn’t be doing our job as personal finance experts if we didn’t highlight the risks of this type of investment. 

Rare collectibles are inherently illiquid assets- finding a buyer can be a lengthy process including significant price negotiation. 

With the right research and simple budgeting, you can find a collectible at a price level that reduces illiquidity concerns while also providing the benefits described above.

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