Hobbies And Personal Interests As Alternative Investments

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With some volatility and uncertainty in the financial markets, balancing and diversifying the portfolio with alternative investments has been the game plan of investors and analysts as these strategies are paying lucrative returns.

Alternative investments have captured the attention of many investors. An example of which is tangible collectibles that stem from hobbies or personal interests. According to one study, one in six investors now includes in their portfolios items such as watches, coins, stamps, classic cars, and fine wine and other spirits.

It costs on average an investor around $18,000 to spend on an item considered to be an alternative investment. It typically nets a return that is marked at 39 percent per item, in the short term.

Based on auction price data, luxury alternative investments over the long run can be the most lucrative undertaking. Classic cars have shown to collect a 469 percent in return more than 10 years after initial investment. Art, wine, and gold, on the other hand, net more than 200 percent.

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However, even some people during the past years are spending less than a thousand dollars on these hobbies and personal interest investments. This illustrates that high cost is not necessarily a hindrance to diversifying portfolios.

The key to the success of this alternative investment segment is research. By partnering with an investment firm whose expertise is in these markets, these investments can be well taken advantage of.

Investment strategist Charles F. Whitman uses both fundamental and technical data to analyze market environments and formulate trading ideas that target exceptional risk-adjusted returns. He founded Chicago-based Whitman Asset Management, a firm that provides alternative investment programs. Read more about Mr. Whitman and his company by visiting this website.