Bring out your investments

March 26, 2018

In these unpredictable times, some opportunists are searching for diversity and returns through unconventional investments.

Global stock markets are yo-yoing, cryptocurrencies are struggling for mainstream acceptance and traditional safe havens such as bonds aren’t exactly delivering big returns.

Demand for beef from Asia is growing and prices are rising in the UK and United States

Perhaps this is why we’re seeing less conventional investment behaviours, particularly from investors with the ‘play money’ to dabble. From footwear to wine, these less trodden paths make a great barbecue conversation and can be a good gamble – for those who can afford to lose their investment.

Mercer financial adviser Andrew George says investors should align their values and behaviour, so they can stay on track to reach their goals.

“Opportunities are everywhere if you look, but if they don’t line up with your values and your strategy and what it’s designed to achieve, they’re not something we’d recommend pursuing.”

 

Toys

During the 1990s, adults and children alike became obsessed with the Beanie Baby brand of stuffed toys. Although most retailed for less than $US10 (and still do today), the relative scarcity of certain styles created a thriving collectibles market that commands prices above $US5000 for some varieties.

Identifying the next craze may be tricky, but long-established brands such as Lego can also provide reliable returns if you purchase wisely: some limited-edition Lego sets produced between 2007 and 2009 now fetch more than 10 times their purchase prices, for example.

 

Cattle

High barriers to entry and decades of global beef oversupply have limited investment in the Australian and overseas cattle industries. But demand for beef from Asia is growing (exports to China are set to grow by 15% in 2018 to 120,000 tonnes) and prices are rising in the UK and United States, making now a good time to start paying attention. Some cattle companies are listed on the ASX, while Beef Stock Market Australia gives small investors a way to purchase cattle that is managed by a third party. Alternatively, as the ABC reports, those people with the means to purchase and manage cattle themselves may find their investment appreciating quickly.

 

Sneakers

Traditional investors may raise their eyebrows, but the market for so-called “deadstock” sneakers (unworn shoes that are no longer in production) passed $US1 billion in the United States alone last year, and just one pair can command $US25,000. Sneaker makers are actively fuelling the market, releasing limited-edition shoes they hope will bestow cachet on their mass-market products. Trading infrastructure is maturing: two big deadstock retailers, Flight Club and GOAT (the latter backed by seed accelerator Y Combinator) recently merged, and GOAT announced it had raised $60 million in new funding.

 

French wine

In decades past, a rule of thumb for wine aficionados was to buy five cases, wait 10 years, drink two of the cases and sell the remaining three. The return on those three cases would be enough to purchase another five new cases. But in 2018, good French wines can offer much better returns than that: the Burgundy 150 wine index rose 298% over the past 15 years, for example.

But your investment needn’t take up your entire cellar or garage to generate substantial sums: a single bottle of Domaine Romanée-Conti Grand Cru’s 1990 vintage now sells for more than £15,000 ($26,500). Check out Liv-ex (the Sotheby’s of wine) and Wine Owners (the eBay of wine) to get started.

 

 

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