Unusual investment strategies: Thinking outside the stock
For the more conservatively minded, stock market shares usually are the first port of call when it comes to investing their finances. Investing in company shares is a great way to increase your wealth through thriving businesses whilst also supporting innovation and change in enterprise.
However, some investors choose to take another path when developing their investment portfolios. In the modern world, there’s plenty of opportunity to think outside the stock when it comes to investment.
Domain names
Investing in the intangible in the digital age can be a fruitful strategy. Website domain names are a great example of how many forward-thinkers were able to snap up desirable web addresses before their time, and sell them for literally millions to corporations who sought them afterwards. The list of highest selling domain names ever is eye-watering.
Notable examples are insurance.com ($35m), privatejet.com ($30m), and hotels.com ($11m). Some of the other highest selling names belong at the adult end of the scale, with no prizes for guessing what they were. Another famous example is Rick Schwartz, who in 1996 bought the name eBet.com for a mere $100. In 2013, he sold it for a staggering $1,350,000.
To get the edge in the domain name buying economy, it’s important to have a keen eye for developing trends in industries that have the potential to explode in the future and to speculate what people will be searching for in 5 years’ time. The price for purchasing new or as yet unrealised names is also relatively inexpensive. At 20 years old, the internet is only in its infancy, after all.
Comics
From the outside, many might view the investment in rare editions of comic books as a kooky hobby for enthusiasts of a dying genre. While the physical form of nearly all literature is on the decline, it seems the collectible lust for comic books shows no signs of fading any time soon.
Part of what gives collectible comic books their financial clout is there condition. The word ‘mint’ holds gravitas in comic book investment circles. A comic perfectly preserved in its original plastic packaging, without having ever been opened (the irony, we know) can fetch huge sums of money. Reputation and rarity are the other parameters by which a comic book’s worth is determined.
In an extreme example of investment strategy paying off in this world, a single copy of the June 1938 edition of "Action Comics 1" – considered the granddaddy of the superhero genre – sold for more than $2 million back in 2011. Spider-Man is among the most highly collected superhero in the world of comic books. Five years ago, the edition “Amazing Fantasy 15” sold for around $2,500 to $3,000. Today, the same comic book is worth about $7,000.
Some experts in the field, like Vincent Zurzolo, claim that comic books are recession proof. “When the economy is doing poorly, people are looking for alternative forms of investment,” he said. “When the economy is doing great they have more discretionary income and they buy comic books.”
The key to comic book investing today is to have an eye for which contemporary comics will be highly sought after in 20 to 30 years’ time. Following auctions and trying to find trends in purchasing, such as characters that will be showcased in a new movie. With Marvel and DC Comics’ commitment to making countless movies every year now, this could be as good a time as any to jump on the bandwagon.
Wine
Drinking, rather than investing in, is most people’s preference when it comes to wine. How about doing both? Even for those who don’t classify themselves as wine connoisseurs, ageing wine is known for its particularly palette-tickling flavours. The question is do you have the restraint to keep it on your shelf for long enough to see a return on investments, or does the idea of cracking open the cork tempt you too much?
According to The Knight Frank Luxury Investment Index, wine has recently replaced classic cars as the top collectible for wealthy investors of the finer things in life. Collectible wine prices surged 25 percent last year, and are up 61 percent over the past five years. Investment funds have been created that focus only on wine for their clients, as well as 3 wine stock exchanges pouring with opportunity for the serious investors.
What gives wine its current and future values are its ratings and scarcity. Wine critics use a scoring system out of 100 to measure their satisfaction with the bottle, and to reach the standards of ‘high quality’ a score of 95 or above is usually required. Ready to cash-in on a bottle? The best place to sell collectible wines is at an auction house rather than online. Patience is also key with wine collecting – be prepared to wait for 6-8 years for a serious return on your bottle.
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