If the recent financial crises have shown anything, it is that the fewest traditional investments are able to maintain and protect their own value, adjusted for inflation and crisis-proof. For example, existing market volatility and persistent interest rate lows in the past decade have led to increased demand for more diversified forms of investment, preferably physical assets that are inherently valuable and have limited supply.
In addition to real estate, tangible assets such as art, wine, vintage cars and watches are enjoying increasing popularity. The desire for tangibility and individuality, coupled with increasing uncertainty on the financial markets, is encouraging more and more investors to invest part of their capital in real assets. According to the Barclays Wealth Insights Report, wealthy individuals hold an average of 5 - 10% of their total assets in tangible assets and even up to 20% in Asia and the Middle East.
While the enjoyment of ownership is the primary motive for investing in real assets, efforts to diversify portfolios are also playing an increasingly significant role. The unique combination of storing or increasing value and the social interaction options (emotion, communication and status) make so-called “passion assets” so attractive from a collector's point of view. In this respect, emotional as well as economic, financial and tax reasons can have a legitimate influence on an investment decision.
# 1 - Enjoyment of ownership
# 2 - Increase in value
# 3 - Value retention
# 4 - Diversification
# 5 - Prestige
Recent studies, such as the Knight Frank Wealth Report, show that most alternative asset classes have outperformed traditional investments in the long run. Art, fine wine and classic cars have seen enormous increases in value over the past ten years. Passion assets can offer a high level of security due to their low correlation to other financial markets. In addition, the individually selected real assets, even with temporary loss of value, can continue to generate an "emotional return".
Brinks Investments offers market-leading information on all relevant alternative asset classes. The combination of a conscientious analytical approach and simple, understandable explanations guarantee an excellent overview for future and experienced investors. In the available investment manuals, individual asset classes are analyzed and explained in detail in order to guarantee a reliable basis for successful and sustainable investment decisions.
Art is the leading alternative asset class, although in recent years it has lagged behind other values such as wine and classic cars in terms of value appreciation. In recent years the average value of art auctioned increased by more than 20%.
Investing in wine, be it a single bottle or an entire collection, has repeatedly led to low-risk returns. Despite the several global economic crisis, the wine market has remained very stable throughout the past 50 years.
Timepieces have lagged slightly behind other asset classes in recent years. Nevertheless, they represent a reliable store of value, which is particularly due to annual price increases and regulated production quantities.