Investors can be divided into two camps: traditionalists, those who favor predictability; and contrarians, those who prefer surprises.
Contrarians aren’t looking for predictable ways to put their 401K to work and to max out their Roth IRA. They are thrill seekers by temperament and they’re in the investment game for the adventure. They are rewarded by unexpected, uncommon, and unique investment opportunities, not by investing in assets and partaking in ventures that guarantee income generation. As a consequence, they shun conventional financial advice, finding it boring.
While it’s easy to dismiss this reluctance to be boxed in as a mere idiosyncrasy, what often appears to be eccentric, can turn out to be unbelievably profitable. Instead of hoping for the reassurance of the long-term rewards of dollar cost averaging, these investors delight in discoveries. For instance, in the elite world of high-end art, contrarians marvel at stories like how Mark Rothko’s abstract expressionist painting, “Orange, Red, Yellow,” was sold at Christie’s auction in New York for $86.9 million.
WHAT ARE UNUSUAL ALTERNATIVE INVESTMENTS?
According to contrarians, money is pouring into the following unusual investments:
- Fine art
- Vintage cars
- Rare currency
- Silent business ownership
- Peer-to-peer lending
You’ll also come to notice that these investments are usually evergreen. The top unusual investments in 2017 will probably still rank high in 2018.
WHAT ARE UNUSUAL INVESTMENT STRATEGIES?
Let’s now take a closer look at what strategies you’ll need to deploy to make money from these unusual investments:
1. Fine Art: Recognizing Beauty
Fine art investments attract contrarians who celebrate artistic creativity.
While most conventional investments are based on research, analysis, and forecasting, fine art investing is based on the lure of astonishing stories. What makes these narratives so engaging is that they happen to be true.
While a stock trader’s pulse quickens when they hear about a bullish market or particularly attractive mutual funds, a fine art contrarian’s heart beats faster when they hear about how “The Scream,” painted by Edvard Munch in 1895 sold at Sotheby’s in New York for $119.9 million or about how “Nude, Green, Leave and Bust,” painted by Pablo Picasso in 1932 sold at Christie’s in New York for $106.5 million.
In essence, then, the only meaningful strategy when it comes to something as subjective as fine art is passion. If you love something you see at an art gallery, buy it. Investors who choose well will want to sell it at for a handsome profit in the future. Ironically, as art lovers, if they have chosen well, they may not want to sell it at all.
2. Vintage Cars: Celebrating Nostalgia
Vintage car investments attract contrarians who feel nostalgia over the technology of yesteryear.
Stories also inform the buying and selling decisions of vintage car investors. Like the stories told in the art world, they are also tinged with legendary characters and the melodrama of staggering figures. For instance, Steve McQueen, who was a famous actor in his day and made movies about racing, was also a famous car collector. So, it was no surprise when his Ferrari 275 GTB sold at an auction for $7.9 million.
Still, unlike fine art, appreciation for vintage cars isn’t entirely based on subjectivity. There are some objective measures, too, like an appreciation for excellence in engineering. If you scour vintage websites looking for late-model cars destined to become classics, you’ll often find car experts endorsing Ford F-150 SVT Raptor, Mercedes-Benz C63 AMG, Chevrolet SS/Pontiac G8 GXP, Nissan GT-R, Honda S2000 MW 1-Series M Coupe, and Porsche Cayman R/Boxster Spyder. What all these diverse selections have in common are superb design and impeccable engineering.
3. Wine: Defining Taste
Wine investments attract contrarians who have acquired a sophisticated palate.
At first blush, it might be difficult to understand why a commodity as abundant and consumable as wine would be treasured as an investment. But this observation only holds true if considering wines currently available for sale to the public. Valuation rises when considering the right vintage aged over a long period of time.
To be successful with this type of investment, you must have a comprehensive knowledge of wine. For instance, you must know about the world’s finest wine areas, the distinct qualities of the primary varieties of grapes, and the exacting process of vinification.
Unless you have a profound understanding about the rarified world of winemaking, you will not know what to buy, the technicalities of storage and handling, and where to find buyers with sophisticated tastes interested in snapping up your perfectly matured wine.
4. Currency: Appreciating Value
Currency investments attract contrarians who like the precision with which money measures value.
What is a currency? It is an entry in a database. What makes it valuable is that only a limited number of entries are permitted. In the past, this limitation was based on tying a currency with gold. Now, with fiat currency, the limitation is merely something that government and central banks have designated. So, for instance, the dollars you have in your bank account is a limited entry that can’t be changed unless specific conditions are fulfilled.
In short, money is nothing more than a verified entry in some type of authorized database. The form of money is secondary — cash, coins, checks, credit cards, or debit cards.
Based on this definition of currency, there are at least three ways that you can make money with currency: by investing in cryptocurrencies, by investing in foreign currencies, and by investing in rare currencies.
What is Cryptocurrency?
Based on this definition, cryptocurrency is real money; it’s not play money nor an alternative form of financing transactions. For instance, a cryptocurrency like Bitcoin is just as valid as a United States dollar, a Japanese yen, a Euro, a Kenyan shilling, a Hong Kong dollar, a South Korean won, an Indian rupee, or pound sterling. The only thing different about Bitcoin is that it’s based on a peer-to-peer computer network rather than a central banking system. Every peer has a complete record of all transactions and the balance of every Bitcoin holder’s account.
What makes cryptocurrency fascinating for investors is that it may be the future of money. Those who champion it argue that it resolves most of the problems associated with traditional money, problems that arise from middlemen, specifically central banks and governments, who conjure up self-serving policies that hamper the fair distribution of money.
What are Foreign Currency Investments?
The Foreign Currency market is the biggest financial market in the world. While the Foreign Exchange (FX) market’s trading volume is $5.3 trillion, the future’s market is $437.4 billion, the equities market is $191 billion, and the New York Stock Exchange is $28 billion. To put this in perspective, compare the FX market with something you may be more familiar with, like the New York stock exchange. It would take about a month of trading on the New York stock exchange to match the amount of trading done in a single day in the Foreign Exchange market.
How Do you Trade Foreign Currencies?
If you have a little money to invest and not enough time to study exactly how this financial juggernaut influences the destiny of nations, you can still use foreign currency exchanges to your advantage by investing in the Iraqi dinar or Vietnamese dong. Both these currencies are selling at a low cost when compared to the United States dollar. This means that you can scoop up a large amount at a bargain. What makes this a good investment is that both these countries are reportedly poised for dramatic change, both being in the throes of economic recovery. As a currency investor, you can make a profit by buying low and selling high because these currencies are set to revalue in a big way.
What are Rare Currencies?
The best thing about rare currencies like US gold coins, silver coins, and certain platinum coins is that you can buy them with your IRA. These unusual IRA investments could provide a lucrative revenue stream or a diversified portfolio. They are usually available in a variety of sizes–one-tenth-ounce denominations, quarter-ounce, half-ounce, and 1-ounce.
Gold and silver have been considered valuable throughout recorded history. Today, coins made out of these rare metals are valued because they remain stable when inflation rises and stock markets crash.
5. Silent Business Ownership: Recognizing Talent
Small business investments attract contrarians who recognize extraordinary talent in commerce.
Starting your own business is always a risky venture, but it becomes riskier if you only have the capital to start the business but not the specialized knowledge to build it. While you can, of course, outsource the work, it still requires you to be knowledgeable enough to organize the workforce.
Meanwhile, someone else could have just the opposite problem. They could have spent years studying a subject with many more years of experience mastering all the skill sets necessary to run a business…but have little to no money to even get their ambitious project off the ground.
By becoming a silent business partner, you supply the capital while your partner supplies the knowledge and skills necessary to run it.
It’s unusual that you’ll become a silent business partner by chance. In all probabilities, you’ll discover smart investing ideas by first starting out as an investment adviser who has acquired a reputation as someone interested in unusual investments ideas, in looking for the next big thing to invest in, and in seeking new investment opportunities, investments that make money.
6. Collectibles: Monetizing Novelty
Collectible investments attract contrarians who appreciate the novelty of accumulating interesting things.
Collecting things is usually considered a hobby. Sports memorabilia, stamps, coins, comic books, antique pocket watches, compasses, crystals, and toys are just some of the things that people love to collect.
Often these are only beautiful and valuable in the eyes of the beholder. While most would be dismissed as worthless, some may fetch a few hundred dollars at the most–but, then, of course, there are the wonderful exceptions. A case in point: the wonderful world of Lego.
How much would you pay for a Lego set released in 2007 if the original price was $499.99 (because it had the second highest number of Legos ever manufactured)? On Amazon, the LEGO Star Wars Ultimate Collector’s Millennium Falcon was selling for $6,379.71. This is just one instance where a collectible was also a good investment.
7. Peer-to-Peer Lending: Nurturing Enterprise
Lending-based investments attract contrarians who want to nurture commercial enterprise.
You can use an online service specializing in peer-to-peer lending, usually referred to as P2P lending, to either borrow money or to lend it. As a lender, you can provide borrowers amounts ranging from $1,000 to $30,000 plus. Your contributions will empower charities, companies, or entrepreneurs to flourish. In return, you’ll profit from the interest after paying the online platform 1%.
As a lender, you can get involved in all sorts of interesting projects, including unusual real estate investments and alternative investments. You will be funding all sorts of people, such as owners of startup companies, real estate dealers, and stock market investors.
You will also have to risk funds based entirely on borrower’s financial statements. In some cases, financial reporting may be inaccurate, so you’ll have to be on guard for fraud risks.
Weird and unusual investment strategies have long ignited interest from certain types of investors, but it can often be difficult to discern the reason for their quixotic taste. While traditional investors think of stocks, bonds, and certificates of deposit as the safest long-term strategies, contrarians aren’t seduced by the siren song of low-risk investments. For contrarians, passion comes first, income second.
If you’re a contrarian, you have two options: go all out or consider novel investments as an uncommon way to diversify the investments for your IRA. You may simply want to find interesting ways to invest $1,000 at a time.
Regardless of the type of contrarian camp you identify yourself with, the main caveat for investors of unique assets or services remains the same: you need to care about the commodity. You must have a passionate interest in your chosen investment because it will often take time and patience to learn everything you can about it. If, for instance, you’re a fine art collector, you should also be something of an armchair art historian. Or, if you’re fascinated by wines, then you should have the acquired taste and sensibilities of a sommelier.
Here, at Treasury Vault, we can help you with one particular type of alternative investment: currencies. We’ve been working with gold, silver, and foreign currencies for a long time now. Contact us for more information on how we can help you with these types of investments.