These under-the-radar investments are delivering record returns


While stocks and crypto tend to get all the headlines, these lesser-known alternative investments are yielding record profits.

Alternative investments typically have a very low correlation with the stock market, so regardless of how the market performs over the coming months, these three asset classes should continue to generate positive returns.

farmland

Most of the real estate headlines in recent months have focused on single-family home prices, but the best-performing real estate sector in most of the country has actually been farmland.

The Kansas City and Chicago Federal Reserve Banks reported year-over-year increases in farmland values ​​of 20% and 22%, respectively.

The sharp increase in agricultural land prices is partly due to the rising prices of commodities such as maize, wheat and soy. The other less discussed reason for the growing value of farmland is the fact that the supply of farmland is rapidly shrinking as global demand for food increases.

How to Invest in Farmland: Buying a farm is not a viable option for most investors. Fortunately, there are some more practical choices available.

Farmland REITs, such as Gladstone Land Corp LAND and Farmland Partners Inc FPI, offer retail investors a low-cost, passive option to invest in this asset class. However, these REITs are still vulnerable to stock market volatility and could underperform as we head into a bear market.

Another option is a farmland investment platform such as FarmTogether. This platform allows individuals to invest in professionally managed farmland assets through the private market. The minimum investment is higher than a publicly traded REIT, but the private placements have little correlation to the stock market and a stronger potential return.

Wine

Most people enjoy drinking wine, but few understand the potential of this asset class as an investment. Good wine is usually meant to be enjoyed for several years after bottling, as the taste matures with age.

As wines approach peak maturity, demand increases, while supply shrinks as the bottles are consumed. This creates a perfect scenario for the price of these bottles to rise, allowing investors to realize attractive returns.

Wine has historically performed well as an investment, but this market has delivered record profits over the past 12 months.

The Liv-ex 100 index (which tracks the price performance of the 100 most traded wines on the secondary market) rose 24.4% last year on February 28, 2022.

In fact, 2021 broke all previous records for the fine wine secondary market, followed by Liv-ex. The Liv-ex 100 passed its 10-year high, with both the Liv-ex 100 and Liv-ex 1000 indices closing the year up 18 months in a row.

Fine wine is a tangible and consumable good, so its value is better protected than many traditional, intangible investments. This trait has made wine a historically stable investment, losing just 1% during the 2008 market crash while the S&P 500 fell 37%.

How to invest in wine: Loading bottles from the local grocery store is unlikely to yield a financial return. Wines traded on the secondary market come from the top producers and are often difficult for the average person to reach.

The best option for most retail investors looking to enter the wine market is to invest through a wine investment platform that can buy the most sought-after bottles and have the connections to sell them when the time is right.

Vinovest and Vint are the two most well-known and reputable platforms, each with a different investment strategy. Vint offers shares in its various collections, while Vinovest actually allows investors to take possession of their wines if they wish.

Contemporary art

Art has been a prized possession for centuries and its popularity is still growing. According to artprice.com’s The Contemporary Art Market Report for 2021, $2.7 billion worth of contemporary artworks changed hands during the 2020/21 exercise, setting a new record for the market.

This figure includes a total of 102,000 contemporary works that changed hands over the 12 months, which is 10 times more than 20 years ago.

The 12 month period also included some extraordinary prize gains on multiple works. Flora Yukhnovich’s Pretty Little Thing (2019) auctioned at a high value of $80,000, but sold for $1,179,500. Amy Sherald’s The Bathers (2015) was highly valued at $200,000 before going up for auction, eventually grossing nearly $4.3 million.

How to Invest in Art: Even paintings worth as little as $15,000 saw 10x price gains last year, so it’s possible for individual investors to get directly into this market. But knowing which artists and paintings will be in demand is another story.

Fortunately, private investors have a few options for investing in contemporary art that have been selected by experienced experts in the field.

While alternative investment platforms such as Yieldstreet and StartEngine often have offers for valuable paintings, Masterworks is the only platform dedicated to investing in contemporary art.

The platform even recently announced the sale of one of its paintings that delivered a net internal rate of return (IRR) of 33% to investors in about 13 months.

Looking for ways to diversify your portfolio and increase returns? This list of the best alternative investment platforms is a great place to start.

Photo by Polina Rytova on Unsplash


This post These under-the-radar investments are delivering record returns was original published at “https://www.benzinga.com/trading-ideas/long-ideas/22/03/26065254/these-under-the-radar-investments-are-producing-record-breaking-returns”

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