Alternative stores of value thread

Finance
#1

Please use this thread to discuss only alternative stores of value, those not already discussed on others of our threads.

Off limits here:

  • stocks
  • bonds
  • CDs
  • gold
  • silver
  • cash or cash equivalents
  • crypto
  • land and other real estate

On topic here:

  • paintings and other art
  • diamonds and other precious stones
  • fine musical instruments
  • collectable automobiles
  • antiques and other collectables
  • high value camera lenses
  • ammunition and firearms
  • fine wine
  • rare coins and stamps
  • A store of value is an asset that maintains its value, rather than depreciating.

Rather that ā€œmaintains its valueā€, I would say ā€œmaintains its purchasing power after conversion to cashā€. Stores of value are especially important in times of significant inflation.

#2

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#3

Alternative stores of value face, nearly across the board, issues of fraud. Iā€™m going to pick on paintings in this post:

These frauds involve millions of dollars and victimize even very sophisticated art experts and investors.

But at the same time, genuine art can be an excellent store of value when carefully chosen at time of purchase.

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#4

I have a modest amount of my money invested in

  • private equity, in a variety of small companies
  • hedge funds, in several funds where I know the managers as fellow traders/investors

These are certainly more risky, especially private equity, but so far they have been outperforming inflation in aggregate over the last year or so which is more than can be said for most traditional assets.

I suppose another broad category would be

  • commodities, not just gold/silver, but you can invest in crude, nat gas, coal, various base metals, lumber, hogs, etc.

these are quite high on the risk side, but often do well during inflationary environments. Futures are available for many of these via many brokers. There are a few ETPs for some of the popular ones (USO for oil, UNG for gas), as well as some mutual funds and ETFs (DJP, PCRIX) which hold diversified commodity baskets. Thatā€™s without getting into commodity-focused stocks.

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#5

Not that I would do this as I have purchased Lego as future gifts that have gone down in price and as noted in the article, ā€œNot all sets are equally successful, and one must be a real LEGO fan to sort out the market nuances and see the investment potential in a particular set.ā€

I post this both for amusement but also as a reminder of ā€œinvest in what you knowā€ even if it is toys.

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#6

This is your thing, isnā€™t it? Do you have any confidence that those who deal with your estate will get a fair value out of your collection?

#7

I very seriously doubt it.

#8

That was kind of my point ā€“ itā€™s only a store of value for the expert, in this case a niche expert. Paintings and antiques can be sold by an auction house for a fee. Something like lenses, precious stones, and stamps probably lose a whole lot of ā€œvalueā€ quickly in the wrong hands. Or even in the right hands if smaller market = bigger fees.

#9

The above a good tutorial for those having interest in diamonds as an investment. Warning:

That piece covers the many pitfalls of putting your money into diamonds. And I do mean MANY!!

My take:

A key thing I like about diamonds is their resistance to oxidation, when compared with many other alternative investments. They are small, store well, and do not rust. Transporting valuables across time is something to which I have devoted a bit of thought over the years. Iā€™ll sum up:

It ainā€™t easy!

And thatā€™s an understatement.

In addition and perhaps worse:

It can be costly.

You cannot devote too much thought or consideration to such matters when investment in alternatives beckons. :wink:

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#10

Diamonds are a girls best friend! But as an investment, I would say probably no.

My :cry: sad storyā€¦ I inherited my motherā€™s diamond wedding ring. Perfect 2 carot (sp) that Iā€˜ve never taken off my finger for many years. A couple weeks ago I happened to look at my finger and the diamond was gone. Made me sick, no way of finding such a small item. Yes, I know it should have been insured. Also I should have had a jeweler inspection to make sure that the diamond was secure. But gone now and never to be forgottenā€¦ :frowning:

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#11

That is a terrible article. It contradicts itself by claiming that diamonds can be a good investment, except theyā€™re extremely difficult to resell and will usually lose 50% of the original purchase price. I suppose they can be good if youā€™re living through hyperinflation, or maybe if you donā€™t have enough room for truckloads of illegal cash.

Uhm, yes it is. Thereā€™s only one reason theyā€™re popular ā€“ the DeBeersā€™ advertising (and control of the indutstry), and humans being irrational. Diamonds were not a big deal before advertising.

Personally I never understood the appeal. We can make cheap synthetic stones that are even more sparkly than diamonds, and it takes an expert to differentiate real from synthetic, and last I looked into this they only way the experts could tell them apart was because the synthetics were too perfect.

The article doesnā€™t even mention synthetics and look-alikes.

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#12

Yikes! I am sorry for your loss, and canā€™t believe you can talk about it already. If my wife lost her grandmotherā€™s earrings (beautiful) or rings (not so beautiful), she would be devastated, even though they are insured.

#13

What do rich people do?

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#14

Royalties. Some are album / song proceeds, some are product sales like one ice cream flavor, etc. you can buy and sell the royalties on custom exchanges like this one.

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#15

Listerine royalties

https://thehustle.co/the-people-making-millions-off-listerine-royalties/

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