A recent article on CNN Money highlighted what I like to refer to as truly alternative investments. The article, entitled “Investments You Can Live With” covered four categories of ‘investments’ which one can use or display (or drink!) in their home. Wine, photographs, antique furniture, and paintings are all mentioned as possible additions to your investment portfolio.
The things mentioned in the article are all down various percentages from the values at their peak prices. As the rising tide of the post-dot-com boom lifted most boats, so too were lifted these alternative investments. In the ensuing fall of house prices, a number of these investments got hit as well – only to climb back slowly from their bottoms. My issue with the categories listed? Art and photography are personal things. I would rather pay for something I absolutely liked instead of something I felt had the highest appreciation potential. The same thing for furniture. With wine… maybe in a large enough cellar I could see investing in a wine I didn’t much care for… but that doesn’t mean you won’t be tempted to serve your guests some of your potential profits!
That’s my issue with alternative investments… I find it hard to look at the categories listed as investment categories. Add that to the fact that they don’t have favorable tax treatment if they do appreciate (and are sold for a profit), and it adds up to a category more personal than financial. With me, it would be the same thing as cars and guitars… and I would find it hard to rationalize that my purchases were actually investments.
Readers, do you invest in anything interesting in lieu of mutual funds or stocks and bonds?