Alternative investments: Have you ever considered investing in art, gold, or wine?

Art: emotions might distract you

The art investment market does have a certain appeal to it. Why? Because the fundamental difference between this market and others is that it might involve personal taste, and therefore — emotion. That’s the first thing I wish to warn you about: Rule number one for successful investments in art is to overcome your taste. Stay focused on what will most likely bring you profit, regardless of our aesthetic views and preferences.

Gold: short term vs long term

Are you familiar with the axiom, according to which the value of precious metals increases constantly? Well, I hope you haven’t decided to enter the world of gold investments because of this idea. Don’t get me wrong, it’s some what true, but not entirely true. The constant growth in the value of precious metals as gold is real, but mainly in the long run. Gold is sometimes called a ‘crisis asset’ — meaning it preserves its value through periods of inflation and armed conflicts, while other assets might be volatile. But in times of economic growth, gold might experience a decrease in value, or be less profitable than other assets.

Gold bars
Photo by: Shutterstock

Wine: the entry threshold

It’s been about twenty or so years since the wine investment market first became popular. This trend is related to the establishment of the London International Vintners Exchange in 1999. Don’t be mistaken — entering the wine market is far from simple. I highly recommend that novice investors in this field do so with the aid of a specialist.

Starting small

When you invest in ‘non-orthodox’ commodities, you should bring to mind that when entering new markets, you also let new variables in. Novice investors might not have the resources and time to manage the new factors that should be brought to mind. Also, in order to succeed, one needs the ability to look ahead to the long run, to make investing worthwhile. It’s not my intention to deter you from trying new fields of investments, though I do wish that you’ll be aware of all major aspects involved in entering these fields.

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