by Lina Martinez

When it comes to advice about investment strategies,  much of it revolves around the stock market or other ways of investing where, for a novice investor, you may feel like you are letting your money go out into the unknown. After all, while you are able to watch and monitor the performance, you can not touch it or hold it. The security of being able to interact with and physically having it at your disposal can make people feel much more comfortable, particularly in the digital age, and one where traditional forms of investment, such as stocks and shares, are struggling. Tangible assets can include anything from properties to exquisite jewelry, gold or silver bullion, fine wine and art. 

Investing in this kind of asset is not always as easy as conventional investments, such as stocks, shares and bonds, but if the portfolio is carefully controlled and the market is monitored continuously, investors may expect some decent returns in the longer term, with less risk. In fact, tangible assets are thought to be able to perform better in the long term and therefore, have played a significant role for many people in preparing their retirement or the future of their children.

Knowing which of these is best to spend your money on can be very difficult, but here are some of the most common choices investors make.

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Land and property

“90% of all millionaires become so through owning real estate” Andrew Carnegie.

Real estate has been one of the most successful and profitable tangible investments for as long as humans have understood the concept of investing.    People all over the world make money from property by purchasing and selling land to developers for profit, renting land and buildings, and investing in companies that manage real estate. They can also be a wonderful thing to have if you are worried about retirement opportunities or the financial future of your children. Wherever you are, you will usually find a suitable market to put your money in, particularly if you are inclined to look overseas.

If you want to get involved in projects thoroughly and you either have a lot of time or a lot of money, you may want to flip houses and estate, which can be effectively done with house flipping software. You could pick up a starter project at an auction, but do some property assessment because often they come up with a lot more problems than the promo might suggest. Every now and then, the prices of real estate increase, and when that happens, even the smallest of investment assets will see a healthy yield.

Collectibles

“Before you make an investment, make sure that you have gathered enough information on the subject.” Raj Kumar Sultania

Stamps, art, and rare coins are just some of the more prevalent collections that are used for investment purposes, but there are many more. It is also essential to do your homework first to make sure your collection is going to make a profit for you. Collections of toys can be lucrative if you choose wisely, but they can also give rise to risk. This also helps if you are enthusiastic about what you are collecting, but not so much that you can not let it go when it is time.

If you have a bit of knowledge about what it is you want to buy, a reputable auction house is a pretty good starting place, but otherwise, enlist the help of a reliable advisor or dealer. You also need to seek advice from a professional on the best way to transport and store valuable items, particularly art. The correct conditions, as well as adequate insurance and security measures to protect them, is also essential.

Precious metals and gems

“Gold and silver are money...everything else is credit”.J.P Morgan

As with property and land, this is something that has been used as an investment asset for thousands of years due to its inherent value. These involve gold, silver, and platinum, among others. Platinum can be quite a volatile investment, and most people spend their money on either gold or silver, usually in the form of a bullion or coins.    Precious metal appears to maintain its value even during times of economic instability and can be exchanged easily if cash is required. Little knowledge is required about this particular asset other than basic maintenance, such as knowing how to clean silver coins.

Diamonds and other precious gems are worth exploring here as well. Some varieties of diamonds have a higher value than other forms of investment. There are a few ways in which you can invest in these precious stones, buy them from a business or buy the shares of diamond mining firms, or invest in diamond funds. What makes diamonds distinct from gold is that, while gold can be measured and priced at current levels, each diamond must be priced individually. It is an exciting gamble, and if you know what makes a big or rare diamond, you will be thrilled. Only be careful not to unintentionally invest in blood diamonds-mined in conflict with proceeds funding the conflict.

Fine wine

“Wine is constant proof that God loves us and loves to see us happy” Benjamin Franklin

Fine wines have long been a draw for investors, with many seeing annual double-digit returns over the last five years or so. Thanks to its specific qualities, it has been associated with low risk and high yields. Countries in Eastern Asia, such as China and Hong Kong, have recently become very interested in wine as an investment, and as a result, demand and prices have shot through the roof, making it something well worth looking into. 

Oil

Oil is one of the most in-demand resources in the world, and without it, many companies and countries will come to a complete standstill, which is why it is often alluded to as the 'black gold.' This can be one of the more risky things to invest in, and for many, the ethical complexities associated with investing in oil may be off-putting, but there is no denying that there is a prospect for a high-profit margin.

But why should you diversify your investment portfolio?

When researching some of the best things to invest in, you will have no doubt come across article after article and advisor after advisor telling you to ‘diversify your portfolio’, but what does that mean and why should you do it?

Well, you have heard of the saying ‘don’t put all of your eggs in one basket’, haven’t you? That is exactly what diversifying your investment portfolio is all about. It is vital that you do not invest all of your money into one form of investment, and instead, spread it out a little.

The reason for this is simple. 

The financial crises of recent years have taught us that conventional methods of investment such as stocks, shares and bonds are no longer adequate to shield investors from any potentially catastrophic losses. On top of that, if we put the risk aside, they may achieve simple investment goals, but there are other things out there to bring about a better return – cryptocurrencies and tangible assets such as those we have listed above, for example.

Any seasoned investor knows that the diversification of their portfolio is of utmost importance, shielding them from risks and delivering higher returns. Rebalancing the portfolio on a regular basis is one way to do this. Essentially, this involves tracking, purchasing and selling various facets of the portfolio to make sure that each asset is worth at least what it was initially. Increase the inventory on a regular basis, instead of saving up cash and buying in one go, is also recommended, and so is recognizing when to cut your losses. Investment is a long-term game, and often you are going to make losses. Knowing when to get out is an ability that all successful investors will have under their belts.

Understanding what to invest your hard-earned cash in depends solely on you, and how involved you are willing to be. These can require more time and experience than conventional types of investment, such as stocks and shares. You do need to bear in mind how much risk you want to take, and if you can afford to make a loss if the market is turbulent. It is important to remember that no matter how much appeal a tangible asset holds, particularly when the stock market is showing instability, that there will always only be a limited number of buyers when and if you decide to sell them. Liquidising these assets can be difficult as their value is determined by appraisal and not public market pricing. Also, any sale made through an auction house or broker may incur a fee, and this will need to be taken into account.