One man’s trash is another man’s gold is a famous saying that many people have taken a hold of pending the “Great Recession,” as it is now being called. TV shows like American Pickers and Storage Wars popularize the idea of investing in junk.
Another common investment that is viewed as fail proof is to simply buy up gold itself. Silver and gold are in high demand. Other valuables like jewelry, antique cars and stamps have seen upturns in their respective markets as people look for something more tangible and trustworthy to make money on.
But how worthwhile are these alternative forms of “investment” in reality?
“Investing decisions are hardly ever cut and dried,” writes Odysseas Papadimitriou for Coin Week. “The value of commodities investing really depends on your future outlook, current wealth and the particular type of asset you’re interested in.” Depending on what you hope to achieve and how much risk you are willing to take, there are a variety of investment ideas to try.
Many experts would call gold and silver less of an investment for most people and more akin to insurance. Mark Waldman of the finance department at American University says, “They’re insurance, chaos insurance.”
This is because the ROI on precious metals is only around 1 or 2 percent. So if you want to make an investment, you might as well go for something that promises a better payoff. Gold will not provide rapid savings or a healthy supplement for your income.
But it can build a protective hedge against economic crisis. Working as “chaos insurance,” gold and silver will hold their value in an uncertain financial climate. “Precious metals make sense only when an inflationary environment is expected, which would result in degradation of the dollar’s value,” Dr. Vjay Singal, a Professor of Finance at Virginia Tech. Gold and silver help guard against widespread inflation and economic collapse.
While gold is the traditional favorite, viewed as the most precious metal, silver is actually recommended as a better investment by some industry professionals. This is because silver can be bought at a lower price and has a “higher growth potential.”
Whereas gold and silver are more certain insurance types of investment, putting money in coins, stamps and other collector’s items requires expertise and caution. Appreciation-based profits are not a guarantee. In the antiques market, being able to prove authenticity is a key factor. And knowing what items are hot and which are not is equally important so that you can properly assess the value of an investment.
This approach requires “a certain level of expertise and disposable income,” says Papadimitriou. Collecting involves extensive research. When you hear of the extremely rich shifting to physical assets like retired luxury cars and other antiques, there are usually market experts who are hired to find, bargain and purchase the stuff. It is not a market where too many novices are likely (or lucky enough) to strike it big.
Why Jewelry Isn’t a Guarantee Either
Jewelry is famously purchased as an investment you can enjoy. But this rational may not be as wise if you are looking for a good return. The first problem is that jewelry is typically sold at a high mark-up price. The expensive “acquisition cost will naturally depress profit margins.” And unlike a bar of gold or silver, the materials are not always pure, resulting in less of a weighted resale value. As a hard asset, it seems that other investments more regularly result in higher profits.
Making a Quick Investment
Investments come as unique opportunities. Often, they require fast action to jump on them before you are bought out. If an amazing opportunity comes your way and you are unprepared with the cash to take it, companies like TitleBucks.com can make short-term loans which grant you the cash you need right away. After you have secured the investment, there will be more time for shuffling your portfolio and perhaps selling another stock to repay the loan.
Mixing It Up
Probably the best investing advice is to keep a balanced collection of diversified options. This means different stocks and bonds and might even include a few antiques with some gold and silver bars. Stocks are higher risk with perhaps the greatest payoff, while bonds are very low risk by a subsequently limited return. Take time to research which options work best for your situation and be ready to invest when the opportunity arises.
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