Uncovered: What are alternative investments and why you should invest in them?

Fsp Invest, 17 Dec. 2013

Tags: alternative investment, collectibles, art, antiques, stamps, what is an alternative investment, what are the advantages of investing in alternative investments, investing, investing in alternative investments, investing in collectibles

You might have heard the term ‘alternative investments’ bandied around, but what exactly are they? Alternative investments are investments which don’t have anything to do with the financial markets like collectibles. They include items such as stamps, art and antiques. Read on to find out more about alternative investments and collectibles and the advantage of investing some of your cash into them…

When shares buckle, bonds crash and the housing market grinds to a halt, it’s tempting to bail out of everything and put your cash under the mattress, the team of experts at The South African Investor explain...

But, if you’re looking for a less extreme response to difficult times - and one that’s proven to be a very effective wealth builder over time - you need to take a serious look at alternative investments or collectibles.

Alternative investments include:
  • Stamps;
  • Antiques;
  • Art;
  • Coins; and
  • Other collectibles like books and memorabilia.
Collectibles have a very low correlation to traditional investments, like shares.

If you have an investment portfolio, it can be worthwhile to put some of your money into them. Say around 5%.

This is because, even during economic downturns, collectibles tend to hold their value.

Investing in alternative investments offer numerous advantages to your portfolio

The reason for this is simple. Art and collectibles offer your investment portfolio:
  • Diversification;
  • Safety;
  • Liquidity; and
  • Excellent long-term performance.
You see, when traditional investments go down in value, people tend to get out of those markets. The need to put their money into something safer – like gold, art, coins, stamps, etc. - leads to increased demand for alternative investments.

And when this happens, the price of these collectibles tend to rise.

So there you have it, what alternative investments are and the advantages of investing in collectibles.

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