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5 Alternative Investments — for the Few

These assets can pay off, if you know what you're doing

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If you’ve seen Antique Roadshow, you’ve probably gotten a taste for the rich payoffs that can come from buying the right antique. However, many of the same reservations noted already for other alternatives also apply here.

Antiques aren’t liquid and are only financially good in the long term. The costs of selling an antique can eat up around three years of the piece’s appreciation. Plus, antiques are also based on the perceived value of a piece’s uniqueness, age or style.

Another issue is that the gap between the cost of luxuries like antiques and the cost of necessities has been increasing. While this may make the goods more valuable, it has pushed many pieces out of reach for investors — and for the rest of the public. All in all, the market is shrinking.

It’s also hard to predict the demand for knick-knacks down the road. My dad hunted and hoarded old baseball cards for years with little return other than a $200 rookie card. The same holds true for the countless collectors of once-popular Beanie Babies: 97% of the tiny animals are now worth around 50 cents.

Keep in mind that, regardless of your investment strategy, a diversified portfolio is paramount. Don’t bet your life savings on an ancient artifact.

Article printed from InvestorPlace Media,

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