6 Alternative Investments

  • What to Do With Your Rainy-Day Fund

    This year, there have been fears that the stock market might go bust again in the near future, that the real estate market may double dip, and that a bond bubble may be imminent. Even basic savings accounts may be risky places to stow your money these days because most banks are providing extremely low interest rates which, after taxes and inflation, means you actually will lose money in the long term. So if you do have some money to spare and are looking for a place to invest it, now may be the time to consider a few alternative investment options. Photo Credit: aresauburn
    Wine
  • Wine

    Wine may be the ultimate investment option, if you know what to look for. Wine investments, as measured by Liv-ex, the fine wine exchange, have consistently outperformed stock investments measured by the S&P during the past five years, and may continue to do so in the near future. “The savvy investors know that blue chips of wine are the place to be over the next few years as Asia has flocked to this small sector of ultra-rare wines,” said David Sokolin, a wine retailer and author of Investing in Liquid Assets. Sokolin highlights specific examples like the 1982 Lafite Rothschild, which originally sold for $40 a bottle and is now worth $4,500 a bottle. He expects that select vintages of wines by Chateau Latour, Mouton Rothschild and Armand Rousseau will produce 15%-30% growth on investments in the short term. In general, Solokin recommends that potential wine investors do their research beforehand, using publications like Wine Spectator to find out how particular vintages are ranked and how they have traded in the past. Photo Credit: Joe Shlabotnik
    Movies
  • Movies

    While many blockbusters are funded by large production companies, plenty of other movies seek out individual investors to raise funds. One of the most notable examples in recent years is Paranormal Activity, according to Yuri Rutman, head of Noci Pictures Entertainment, a film investment company. This movie was self-financed and cost about $15,000 to produce but ended up making more than $100 million in the box office. However, Rutman emphasizes that most films worth investing in cost significantly more than $15,000 to make. So he argues that a potential investor should be prepared to invest between $500,000 and $1 million on a given project and most importantly, investors should be prepared to invest in a wide range of films in the same way that one would like to diversify their stock portfolio. Of course, it’s important to keep in mind that many, many movies with significant financial backing still end up being flops on the big screen. Photo Credit: Getty Images
    Fine Art
  • Fine Art

    If movies aren’t your thing, then maybe fine art will be. Previous studies have shown during the past 50 years, art investments have had a similar rate of returns to stock investments, and if you happen to get your hands on a particularly noteworthy piece of art by someone like, say, Picasso, then the returns may be substantially greater. That said, investing in art is not really meant for the average Joe. “Considering art as an investment is really a fool’s errand if you’re going to be spending less than $1 million,” said David Kusin, who runs Kusin & Co., a research firm that focuses on fine art. Otherwise your investment options will be too limited in the art world. Photo Credit: WikiCommons.org
    Real Estate
  • Real Estate

    As we said in the beginning, the real estate market is still very shaky and at risk of a double dip down the road. Still, there are opportunities for the savvy investor. According to RealtyTrac, those looking to invest in real estate might consider purchasing a recently foreclosed home or bank-owned real estate at a discount, which you may be able to sell for a profit at a later date. But be warned, if the home is in a neighborhood full of foreclosed properties, it may take longer for its value to rebound. Photo Credit: respires
    Gold
  • Gold

    Gold prices have been at record highs for much of the year thanks to a weaker dollar and concerns about the stability of the economy. So now may be the time to convert some of your cash into gold. And if you need an extra push to do so, just ask Mr. T. Photo Credit: pulguita
    Comics
  • Comics

    It may finally be time to listen to your inner child and start buying up all the comics you can. This year, collectible comic books have been selling for record prices, with one 1939 issue of Batman selling for $1 million, and the first issue of Superman selling for $1.5 million. In fact, one family recently discovered they had a copy of Action Comics No. 1, the first comic in which Superman appears, which they plan to sell off for a $250,000 or more in order to save their home from foreclosure. Photo Credit: Glenn Batuyong
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