Fine art
It’s easy to see why art pieces often fetch new highs at auctions: The supply of the best works of art is limited, and many paintings have already been bought by museums and collectors.
Contemporary artwork has [outperformed the S&P 500] by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.
Artwork is becoming a popular way to diversify because it's a "real" physical asset with little correlation to the stock market.
According to Deloitte’s latest Art & Finance Report, 85% of wealth managers in 2021 believed art should be included as part of a wealth management service.
It’s true that investing in fine art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich. But with a new investing platform, you can [invest in iconic artworks] too, just like Jeff Bezos and Peggy Guggenheim.
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Real estate
Real estate has been a popular asset class as of late — perhaps because it’s a well-known hedge against inflation.
As the price of raw materials and labor goes up, new properties are more expensive to build. And that drives up the price of existing real estate.
Of course, when the Fed raises its benchmark interest rates to tame inflation, mortgage rates tend to go up as well.
However, while it’s true that mortgage payments have been on the rise, real estate has actually demonstrated its resilience in times of rising interest rates according to investment management company Invesco.
“Between 1978 and 2021 there were 10 distinct years where the Federal Funds rate increased,” Invesco says. “Within these 10 identified years, US private real estate outperformed equities and bonds seven times and US public real estate outperformed six times.”
Well-chosen properties can provide more than just price appreciation. Investors also get to earn a steady stream of rental income.
The best part? You don’t need to be a landlord to start investing in real estate. There are plenty of real estate investment trusts (REITs) as well as crowdfunding platforms that can get you started on becoming a real estate mogul.
More: Best REITs to invest in commercial real estate
Wine
People have been consuming wine for thousands of years. While most collect wine for enjoyment rather than investment, bottles of fine wine become rarer and potentially more valuable as time goes by.
Since 2005, Sotheby’s Fine Wine Index has gone up 316%.
As a real asset, fine wine can also provide the diversification you need to protect your portfolio against the volatile effects of inflation and recession.
You can invest in wine by purchasing individual bottles — but you’ll need a place to store them properly. Residential wine cellars often cost tens of thousands of dollars. If not stored at the right temperature or humidity, the bottle could be compromised.
That’s one of the reasons why investing in fine wine used to be an option only for the ultra-rich. But with a new investing platform, you can invest in investment-grade wine too, just like Bill Koch and LeBron James.
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