Are alternative investments a good alternative?


That’s the million dollar question investors are asking as they seek viable options outside traditional, yet volatile stocks and bonds. In this article we’ll take a look at three of the more popular ‘alternative’ investments’ and how they stack up as long term investment prospects.

It may not do on Wall Street, but it will sure do on your wall. And that’s one of the best things about art investments – even if you don’t get a return on investment, you’ll get many happy returns simply walking past it if it’s a piece you personally appreciate. Another plus – art prices tend to avoid the heady highs and heartbreaking lows of stocks and bonds, though the art market hasn’t been totally immune to the financial meltdown. What do you need to invest? Experts suggest at least $10,000 for more noted artists, though far less will get you going if you’re happy to back the potential of an unknown.

Another thing art has in its favour is that you can’t drink it. However if you can shelve your connoisseur temptations along with your wine, returns on investments for fine wines are usually a steady 6 to 15 percent annually. Vineyard and vintage wines are your two main focuses and the good ones of both will generally give a good return in time. The downside? You’ll need to buy a large quantity to achieve a sizeable return. Wines also come with very precise storage requirements meaning you’ll need to invest in specialised coolers or temperature controlled storerooms.

Essentially there are two types of investment coins: bullion and collectible. Only rare coins are considered collectible and their value is based on exactly that; their scarcity. Bullion, on the other hand, is a far from rare commodity minted by governments – South African Krugerrand, US Gold Eagle, and Australian Nugget to name a few – and then bought and sold through gold dealers. Recently a decent per-ounce gold price has made bullion a safe enough investment. Rare collectibles in mint condition – should you be lucky enough to find such a treasure – can double their value in a year. If you plan to dabble in the collectible market, avoid coins that are worn and go for years with fewer mintings; the less mintings, the rarer the coin.

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