What are Alternative investments?
Alternatives, as the name suggests is anything that is not mainstream. That is not to mean that they are someway inferior. When it comes to investing Alternatives simply means anything that is not on the stock market. To a lot of peoples surprise the property market is categorized as an Alternative investment!
Good heavens above, does that mean my investment properties are alternative investments? Yes, in fact anything that is not a stock, bond or cash is an alternative investment.
So let me give you some examples of alternatives:
Property, is an alternative asset class that has been around since, Forever! Forestry is another alternative asset class that is in vogue right now because of its long term hedge against inflation.
Then there are the other alternative asset classes like Gold, Silver, Diamonds, precious metals….you get the picture.
Coins, stamps, watches, Cars, now we are talking about high end watches like Rolex and classic cars like a Ferrari GTO….now who can really afford that, and stamps and coins just sound boring, besides you can't really hang them on the wall and admire them.
That is why I like Art as an alternative. Yes Art…! Art has been emerging as a new asset class for the well heeled investor and the returns achieved are enough to catch anyone’s eye. Just look at the performance of African art in the past 10 years Bonhams art house has seen values increase 5 fold. Sotheby’s whose auctions are world renowned has seen their African art category reach sales of $85million in 2016 compared to only $4million a decade ago.
African art is still very accessible for new investors as prices are still reasonable with pieces selling for between $10,000 to $60,000 at those prices it is still fairly modest which means new entrants can come in and afford a piece and start to build a small portfolio before prices start to rise. With the current level of interest one can only assume that prices will continue to rise for the foreseeable future.
So how do you get a slice of the action? You could visit an auction house and bid on African art pieces as they come up for auction, but this can be time consuming, besides auction houses are intimidating places and if you haven’t done your research, you might end up bidding too much for a piece of art that isn’t worth it.
Why not jump on line and check out some of the reputable online auctions and art collectors who have pieces advertised on their websites, at least this way you can make a decision in the comfort of your own home and hopefully make the right decision.
Happy African art hunting!!
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There are many things to bear in mind when investing, what information do I need to provide in order to proceed, what resources do I have, what are the risks involved.