Stocks, bonds, funds, ETFs – traditional assets kept in a diversified portfolio. But what about stamps, antique furniture, Chinese ceramics, classic cars, art, and wine?
Demand for passion investing has increased steadily as the income of HNWI and UHNWIs has grown in both developed and emerging economies. But what does passion investing deliver that nothing else can?
The joy of ownership
Passion investing, especially when done directly rather than through an investment fund, has a tangibility and intimacy that no other asset can match.
Love of the craft
The things we’re often the most passionate are the things that, despite how good we are in other areas in our life, remain tantalizing beyond reach. Each passion investment has its own unique beauty and a very personal wonder for an investor which goes beyond dividends, stock charts, and financial reports. Some of it is about a return on investment – but a lot of it is about an appreciation of the diversity of human creativity and imagination.
Impressive and countercyclical returns
More and more wealth managers are being asked by clients to invest some of their portfolio in their passion. In the way that gold is often used as a hedge against inflation and volatility, passion investments often move in opposite directions to the main financial indices.
A long term hold
Passion investing is not for the faint-hearted nor is it for an investor looking for a quick return.
Passion investing does not produce an income from your ownership of an asset. You will have to hold on to your investment for a long time, sometimes in excess of 10 years, to make profit when the cost of purchase, the cost of ownership, the cost of selling, and the effect of inflation are taken into consideration.
Caveat emptor
Most passion markets are opaque. Most sales are private. Price discovery is difficult. Mix all of that together with the money needed to invest in a true object of desire and mistakes can easily be made.
There is a multitude of new and exciting ways to invest your money today. Here at Planet of finance we keep track of the most relevant developments to signal them for you. We are the ultimate meeting place to discover, connect and learn about the latest topics relating to your financial wealth.
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