Alternative investments

socratez

My investment portfolio consists of 4/5 safe funds (mostly trackers), a couple of rather safe shares in telecoms and more recently 10% of crypto.

Crypto aside I would consider my investments safe. I will add gold at some point when the prices drops.

I  am now looking for alternative investments but not sure what, I do you understand some of these are more speculative and not regulated. Heard some horrible stories about P2P lending so that's out. I know nothing about art, very little about watches and think that boat has sailed.

I would love to invest in prestige cars as I take an interest in these, but are out of my financial reach. My wife buys limited edition designer handbags that she "thinks" will appreciate, but I'm not sold on the idea and thinks she just loves the bags lol.

Lastly the days of buy to let are over for me. Friends are getting out and talked me throughout bottom line, which look the same as the returns on a decent investment fund.

Anyone had a good ROI on an alternative investment, or got any good ideas for something different?

ChilliBob

Depends how alternative you mean I guess. Private Equity is classed as an alternative asset, and you can invest in this by say HVPE.

I think the sort of things you're mentioning you have got to consider space too, physical stuff takes space, and if you need to raise cash it's harder than selling a listed asset. Oh and of course if it's stolen or damaged its a problem. 

george4064

‘Alternatives’ as an asset class doesn’t necessarily need to be (significantly) more risky than traditional investments, few ideas include;

- Infrastructure (plenty of options)
- Property (loads of options)
- Private Equity (many PE trusts or ETFs to choose from)
- Private Debt
- Legal services (Burford Capital for example, others are available)
- Music royalties (e.g. Hipgnosis Songs Fund, or others)

Finally, you could argue anything you’re not invested in now as an Alternative. So there’s plenty to choose from and no need to make it unecessarily complicated by holding it as a physical asset.

jimjames

I suppose it also depends on amounts. Unless you have a huge portfolio then funds will probably be sufficient for most people. Alternatives like wine or whisky would be more niche things.

Reaper

Alternative investments of the sort you are thinking of are risky. If you are an expert in a subject (eg wine) and take physical possession of the goods then you can make money. If you are not an expert and fail to take possession of the goods (eg wine that they keep and store for you) then you are headed for an unregulated minefield and 100% loss of capital is a distinct possibility.

From what you have said you are not an expert, so I would steer clear. As others have said you can still partake in more alternative fields using traditional funds/shares providing both expertise and the FSCS/FCA safety net that comes with regulated providers.

bostonerimus

Trackers are not safe. They span the risk spectrum.

What do you hope "Alternative Investments" will get you that your current portfolio is not providing? 

socratez

bostonerimus said:

Trackers are not safe. They span the risk spectrum.

What do you hope "Alternative Investments" will get you that your current portfolio is not providing? 

Good question, I guess they are more interesting or exciting. However if I wanted interesting or exciting I could read a book or go to a theme park.

I think some of these newer alternatives, such at watches, there are better returns to be had,  until everyone else cotton's on.

bostonerimus

socratez said:

bostonerimus said:

Trackers are not safe. They span the risk spectrum.

What do you hope "Alternative Investments" will get you that your current portfolio is not providing? 

Good question, I guess they are more interesting or exciting. However if I wanted interesting or exciting I could read a book or go to a theme park.

I think some of these newer alternatives, such at watches, there are better returns to be had,  until everyone else cotton's on.

If you are investing and saving for the long term you don't want "interesting or exciting". Alternative investments are often ways to part a investor from their money. If you like watches etc buy one you like and enjoy it...Grand Seiko is my favorite...and just keep investing your money in those index trackers. Don't feel that you have to be adventurous or different to succeed.

Winebottle

I think of alternative assets as speculative and unregulated by definition. If there was a reliable way of pricing them, they would be more liquid, there would be ETFs for them and they would stop being alternative.

They are interesting because there is no way to determine what returns you can expect which means you may make huge profits (or you may not).

For me, it comes down to how foreseeable the returns are. Picking the next big artist, for example, is very difficult and looking at the returns of the best performing investments will inevitably ignore all the worthless paintings people bought. Wishing you had bought a painting 30 years ago is like wishing you bought Amazon, you didn't know at the time.

Wine and whisky are a bit more predictable. The best Bordeaux vineyards will be the best Bordeaux vineyards in 20 years. There will be less supply of recent vintage because people would have drank them and there will be more rich Chinese and Indians to buy them.

I'd put handbags and watches in between. The popularity of high end  brands is likely to endure but it is difficult to predict which limited editions will be most in demand in the future. It's an artificial scarcity. While it is in the interest of the brands to maintain that to a degree, people may well prefer next year's limiter edition bag to a second hand one. 

I think all these markets are shark infested waters which is why I avoid. 

DoublePolaroid

socratez said:

bostonerimus said:

Trackers are not safe. They span the risk spectrum.

What do you hope "Alternative Investments" will get you that your current portfolio is not providing? 

Good question, I guess they are more interesting or exciting. However if I wanted interesting or exciting I could read a book or go to a theme park.

I think some of these newer alternatives, such at watches, there are better returns to be had,  until everyone else cotton's on.

I am a WIS (Watch Idiot Savant) and I, along with every other experienced watch collector will confirm, watches are not an investment. 

I actually, through good fortune, managed to acquire at list price some highly collectible pieces from a very well known brand and sold them for a profit very recently, at all time high prices. If I look simply at the price paid and the price sold, I would’ve made more if I’d just invested in a vanilla global tracker fund over the period I owned the watches. However that’s not factoring in the costs of insuring them (circa 2% of the total watch value per annum) and servicing the movements, which for a mid-tier luxury watch will cost a few hundred quid every few years. There’s also the fact that you never have to worry about being robbed of your Vanguard Global All Cap holding at knifepoint. I enjoyed the watches and saw the fact that I made a bit on them purely as a bonus. The fact is that these days, if you want to acquire a model which can be sold for a good profit (e.g. Rolex, Patek and AP steel sports watches) you need to have already spent 5-6 figure sums buying less desirable watches and jewellery, so it doesn’t really work out financially. Rather like trying to buy a 911 GT3.

There are a lot of new “watch collectors” from the Insta/TikTok generation who are going to be found wearing no underpants when the tide goes out come the next big recession. A lot of folk think watches are recession proof, but when people start struggling to make mortgage payments and inflation is 10%, the demand for shiny Rolex watches will drop like a singularity. 

Bog standard Seikos and G-Shocks for me now. 

bostonerimus

DoublePolaroid said:

socratez said:

bostonerimus said:

Trackers are not safe. They span the risk spectrum.

What do you hope "Alternative Investments" will get you that your current portfolio is not providing? 

Good question, I guess they are more interesting or exciting. However if I wanted interesting or exciting I could read a book or go to a theme park.

I think some of these newer alternatives, such at watches, there are better returns to be had,  until everyone else cotton's on.

I am a WIS (Watch Idiot Savant) and I, along with every other experienced watch collector will confirm, watches are not an investment. 

I actually, through good fortune, managed to acquire at list price some highly collectible pieces from a very well known brand and sold them for a profit very recently, at all time high prices. If I look simply at the price paid and the price sold, I would’ve made more if I’d just invested in a vanilla global tracker fund over the period I owned the watches. However that’s not factoring in the costs of insuring them (circa 2% of the total watch value per annum) and servicing the movements, which for a mid-tier luxury watch will cost a few hundred quid every few years. There’s also the fact that you never have to worry about being robbed of your Vanguard Global All Cap holding at knifepoint. I enjoyed the watches and saw the fact that I made a bit on them purely as a bonus. The fact is that these days, if you want to acquire a model which can be sold for a good profit (e.g. Rolex, Patek and AP steel sports watches) you need to have already spent 5-6 figure sums buying less desirable watches and jewellery, so it doesn’t really work out financially. Rather like trying to buy a 911 GT3.

There are a lot of new “watch collectors” from the Insta/TikTok generation who are going to be found wearing no underpants when the tide goes out come the next big recession. A lot of folk think watches are recession proof, but when people start struggling to make mortgage payments and inflation is 10%, the demand for shiny Rolex watches will drop like a singularity. 

Bog standard Seikos and G-Shocks for me now. 

You can spend 3 grand on a Seiko now and the sky's the limit for Grand Seiko, but I agree that an inexpensive mechanical Seiko is nice on it's own terms and I actually respect a Seiko wearer more than a Rolex wearer - if they know anything about watches.