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Investing in Rare and Alternative Commodities
If the economic downturn of the last few years has taught us anything, it must be that by trusting large financial corporations with all of our money is maybe not the smartest idea. I am not anti-financial institutions, it is just that I live by that old adage of never leaving all your eggs in one basket.
Perhaps now, in these continued times of financial uncertainty, it is time we took more interest in how our money works for us day to day and how we can increase our profits over a longer time period.
I am not advocating abandoning pension plans, life assurance, saving plans or stocks and shares. This is obviously the market which should guarantee our retirement and having a diverse selection of products is the prudent course of action.
Do you think we can get better returns through commodity investements?
What Alternative Investments Are There?
I was wondering if we are able out perform the standard funds by investing in items that are a bit more radical but will still have continued and stable value. Although conventional markets are relativally reliable, there are more exotic options out there. After all, it is in our own interests to see our money perform to its potential. Perhaps we as individuals should take more responsibility for our investments. The problem with delegating the running of our investments to others, is that as we have seen in recent years. When it goes wrong, it can go spectacularly wrong and thousands can suffer.
So perhaps we need to look at commodities which we can speculate on to effectively grow in value for our designated investement period and hopefully gain at least a 33% increase on initial investment. Of course we don't know what the long term outcome is going to be.
For example we know that oil is a finite resource and that reserves will more than likely be exhausted with the next couple of decades even allowing for better technology and emerging Shale reserves. The question is, do you invest in buying and storing the oil for when the oil is that scarce you can name the sale price. Or do you invest in the shares of an oil company and reap the dividend payouts from higher profits? If you choose the latter you have to factor in that they will have to spend more and more on extraction of the oil and pump more money into alternative fuel sources. This will be an added expense to the company which will effect share price. And at what point do you sell your shares on? And will it be for a gross loss?
Long term investment
So what can we invest in which will always have value. Well the obvious answer is investing in gold. Gold is also a finite resource. Unless someone is able to solve the conundrum of turning base metals into gold we won't be seeing new supplies come into the Market. I exclude the existence of gold on other planets and comets for now, even though it is likely that in the future, this will be an industry that will change the dynamics of some commodity investments.
I have a couple of articles exploring either the value of gold and whether or not to sell your scrap gold, so I will not be retreading old ground here. As alchemy is pout of the question, why not look at other precious metals that could be a good investment. Gemstones and diamonds are always going to be valued, but their value is controlled by the diamond companies. It seems that there are more diamonds than the supplier wish you to believe. An investment in rarer gemstones may be prudent as collectors of luxury items always love the extremes. High fashion will points us to the next luxury good to acquire.
Future value of commodites
Other items to maybe invest in include vintage wines and spirits. Those who invested in rare wine actually made better profits than regular stocks and share in recent years. I have written a hub on investing in rare malt whisky already, so please check that out for more information. Luxury goods such as tobacco and alcohol has been a market which has been largely ignored. There are very potent and largely untapped markets in the Asian countries and as the new rich come through after recession, they will have more money to invest in these commodities.
I also believe that we may see a lot more worth in rarities from the media industries. Although the sale of actual albums has now decreased in relation to downloads. I think it is entirely likely that nostalgia will drive the consumers of this generation to buy back the old records in place of other media a few years down the line.
The trade in vinyl records is still strong and some records are now worth their weight in gold. The medium for music is ever changing, so modern records are already quite rare and valuable.
White label releases ( those records usually issued to clubs or radio stations) are the ones to look out for. These types of record are highly prized already, so if you are able to find one by a big band and are lucky enough to get it autographed you have a strong asset already.
Cutting out the middleman
If this has got your mind thinking that there are other options, then there is a wealth of opportunity and companies that can help on the Internet. Please remember that when trading anything there are fee's involved, but don't let that stop you if you see a niche in the market. The initial outlay could be dwarfed by your future returns. In these times of financial uncertainty you will find people who will be able to make a lot of money by following their instincts and exploiting a market for their future prosperity. This is a long-term investment, but the returns can be handsome if you do your homework. The key to any venture is always research and i believe now is possibly the best time to act. On my 'Rare Malt Whisky- A good Investment' hub their is a commodity company with a link in the comment section, this maybe a good place to start or at least look into.