Superman saves the day
So, after doing some research I found some investments that have yielded returns of between 7 % and 9% over the last year and about 240% over the last 10 years.
I am sure you are wondering what on earth could make such great returns so let me give you a couple of clues before I let you in on the secret:
The Flowing Hair Dollar is the most expensive coin ever sold. It was sold back in May 2005 for $7.85 million. This dollar was first minted back in 1795 and features the image of a woman, with flowing tresses, surrounded by 15 stars with the word “liberty” above her head.
In June 1938, the very first edition of a comic book featuring Superman was published by Action Comics. Fast forward to December 2011 and the lucky owner of one of those first editions sold it for $2.1 million and was reportedly bought by the actor Nicholas Cage.
The first edition of JK Rowlings Harry Potter & the Philosophers Stone had a print run of just 500 and 300 of them were given to libraries leaving only handful of the quality that investors wanted to purchase. A copy of this book was sold last year for…..£18,485
…there are 60 million people worldwide who spend in excess of €73 billion buying stamps alone.
And a Treskelling Yellow is in fact the most valued postage stamp in the world. It was originally sold in 1996 for $3 million but was later sold in 2010 for an un-disclosed amount, apparently far in excess of the $3 million paid for it in ’96.
Of course all of these items are alternative investments that some people, those who it would appear are very wealthy invest in, and of course in these examples we are probably talking about the superrich being the owners but surprisingly there are millions of people who invest in these types of areas with very modest amounts of money.
And there are many other areas people invest in as well like wine, cars, jewellery, art, and so on. And there really is a very big market for them – and not everyone as I said invest the huge amounts I just referred to. For example there are 60 million people worldwide who spend in excess of €73 BILLION buying stamps alone.
Now for some people it is a hobby but for others they buy them purely for investment – they want to get a return from what they bought them at to what they hopefully appreciate to. The reasons for this apparently are driven by two big factors which are (a) very poor interest rates and (b) the financial upheaval that began in 2008 where individuals and institutional investors had to re-think their long held asset allocation strategies.
Of course investing in alternative products rather than putting your money on deposit is a very, specialised area and knowledge and absolute care is required. You obviously need to know you are buying from a name you can trust along with the “five golden criteria” when buying any item which is:
However I am sure if I did I would now be looking at a healthy profit on whatever I invested in given that some wines have appreciated by over 11% each year for the past 10 years. But given the state of our finances back then I think the most we could have scrapped together was the price of a couple of bottles of Blue Nun!
Investing in alternative investments isn’t for the faint hearted though because purchasing things like coins, art, books etc. are very volatile and antique furniture for example is something that has fallen out of flavour in recent times where not only your once held profits take a nose dive so does the amount you used to buy them in the first place (Antique furniture has seen a -19% return from 2003 to June 2013.
Many experts in any field I have referred to recommend that if you are buying either a book, stamp, wine or whatever it is that you do so with the intention of holding onto it for two seven year cycles to see any decent return on your investment. The first seven years you wait until you get your money back and the following seven is where it appreciates beyond what you paid for it.
Investing in alternative investments isn’t for the faint hearted…
I believe using your money to invest in this area is fraught with danger and I don’t like danger when it comes to investing. I don’t want to lose an absolute cent if I or any of my clients invest their money so I believe this is something that people can dabble in once they know the risks involved and are aware they could lose all of their money.
The up-side of course is that you could strike it lucky and buy something that appreciates in value beyond your wildest dreams but the chances of this happening are slim. I think the majority of people invest and buy things they like and enjoy for themselves and get pleasure out of and it is more a hobby for them rather than trying to make any money.
Let me leave you with a very quick story about a man living in the USA. He had been living in this house since the 1950’s but he lost his job and fell behind on his mortgage repayments and the bank was about to repossess his home – he owed $200,000. He was cleaning out his attic putting things in boxes getting ready to move out when he found a very old superman comic – thinking nothing of it he brought it along with other comics to a store to sell hoping to get $100. To his amazement and disbelief that particular comic was worth $436,000 so Superman really did save the day after all so get into your attics and start looking around – you might be surprised at what you will find.
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Managing Director of Harmonics Financial