Taking A Gamble On An Alternative Investment

Investors worried about how Brexit may affect their wealth are looking at other options after years of record low interest rates have impacted on cash in the bank.

Expats can find other opportunities, providing they look hard enough and take good precautions to avoid the sharks.

That’s because one of the problems with alternative investments is they are not regulated and if the deal goes wrong, the only way to get money back is through the courts.

Don’t forget alternative investments are speculative. Buyers are gambling on the price going up and are unlikely to receive any income from holding the asset.

So what are the pros and cons of staking some cash in some of alternative markets?

Property

Property prices are rising on big ticket luxury investments in many global cities, such as London, Hong Kong and New York. Expect to pay £1 million plus for a prestige home in one of these market leaders.

Expect low rental yields – but homes have gone up in price by close to 13% in London in the year to May 2016.

Pro – One of a few asset classes to return an income

Con – Difficult to sell especially if market confidence is waning

Collectibles

A massive collection of Stars Wars toys, costumes and memorabilia is due to go under the hammer expecting to raise £500,000. The force will have to be with the owner as collectibles drift in and out of fashion.

Pro – Selling at the right time ensures a good price

Con – No income. Star Wars is hugely popular, but many other collectibles are niche markets with limited appeal

Fine wines

A corker to some and an investment leaving a bad taste in the mouth for others. Dealers try to push wine as an asset that stores value like other commodities, such as gold.

Pro – The right bottle can sell for thousands

Con – No income, plus storage costs in specialist cellars can be expensive

Art and antiques

Buy a painting, sculpture or other artefact because you like it and do not bank on a price rise.

Good art commands prices in the millions, but the bottom end of the market is a lot tougher for making a profit.

Pro – Buyers get to enjoy their investments

Con – No income, while high insurance and security costs eat into profits

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