When most people think of investing, they generally think of traditional investments—namely stocks, bonds, and cash.
Whether it’s the index fund in your 401(k) or the cash in your savings account, these traditional investments are common for most individual investors.
But that’s only part of the picture. There’s another category of investing beyond traditional investments, called unusual investments.
In this article, we take a look at some of the unusual assets you can invest your money in.
What are Unusual Investments?
Unusual investments are assets that aren’t your traditional investment options.
They can be referred to as alternative investments. These kinds of investments require specialized knowledge, close market, and are highly illiquid – meaning they can’t aren’t easily sold or converted into cash.
Unusual investments cover a wide range of investments with unique characteristics ranging from cars and artwork to sports cards and wines. Let’s have a look at the different types of unusual investments you can invest in.
1. Commodities
Commodities, which are mostly natural resources like agricultural products, oil, natural gas, and precious and industrial metals, are also actual assets. Since they have been traded for thousands of years, commodities are scarcely new to the world of investment.
The earliest official commodity exchanges operated in Osaka, Japan, and Amsterdam, Netherlands, in the 16th and 17th centuries, respectively. The Chicago Board of Trade began dealing in commodity futures in the middle of the 19th century.
Commodities are regarded as a hedge against inflation, though they can be economically sensitive. The price of commodities fluctuates according to supply and demand. As a result, increasing demand for commodities drives up prices, which benefits investors.
2. Sports cards
Sports cards were ideal for many Americans since they remind them of their youth.
However, investors are still accumulating their preferred players or teams, continuing this childhood ritual into adulthood. Investors also seem to enjoy the challenge of wagering on the future of young players’ careers by purchasing their cards.
Trading cards date back to 1886, when Goodwin Tobacco, a company that owns a number of cigarette brands, released the N167 set, a set of baseball cards featuring 12 members of the New York Giants.
The global sports-card trading market was valued at US$635-million in 2022, and it is expected to surpass US$767-million by 2028. – The Globe and Mail
That’s an expected increase of 21% in the next 4 years.
One of the biggest markets in the card-trading industry is baseball card collecting, and demand is driven by the fact that many collectors continually buy cards because they still like the hobby they developed as kids.
3. A vacation home
Vacation rentals – especially short term rentals – are the highest-yielding asset class in real estate.
Buying a vacation rental property is two dreams come true in one. You get a passive income stream and a house on the beach — or in the mountains, the country, a trendy city or some other place worth vacationing.
Vacation homes can be rented out to generate additional revenue when not in use. Your vacation house will be worth more as the destination grows in popularity. Platforms like Airbnb, HomeAway and VRBO can be used to list your vacation home for rent.
With housing prices and interest rates where they are, it could be challenging to find the capital to invest in a vacation home right now.
Another alternative is to invest in fractional ownership – where you invest a portion of the full cost of a vacation home.
As a partial owner, you share in the upkeep costs and maintenance of the property, as well as reap the benefits of any income or increase in property value – equivalent to the percentage you initially invested.
You can also use the home for an agreed-upon time throughout the year. This differs from a timeshare, because you are a partial owner. You share the actual property, not just the time using it.
Investing in Rental Properties? Check These 9 Important Factors First→
4. High-end wristwatches
Luxury and expensive watches are a crazy investment that may also be profitable.
You will need a good knowledge of the luxury watch market and a lot of patience. Take your time realizing your profit after your unusual investment is made.
To buy a very high-quality timepiece, you also need to have very substantial cash. The minimum purchase for this asset type is likely $5,000. For investment objectives, a price range between $10,000 and $20,000 is more likely to be preferable.
There are some watch brands that are thought to be better investments than others. Some of the brands that are usually mentioned include Rolex, Montblanc, and Patek Philippe.
After making your purchase, make sure to maintain the best possible condition for your watch. Keep the original packaging and documents in good condition as well. You’ll likely need to keep the watch for a considerable amount of time, then keep an eye out for favorable market conditions and timing.
As a novel investing concept, watches are not for beginners. Whether you make a significant profit or not, make sure you purchase a piece you are delighted with. You can make sure that your investment will be enjoyable in this way.
5. Vintage cars
Classic cars and vintage automobiles are a different story.
They may be enjoyable, captivating, and distinctive investments that appreciate value over time. However, only a small number of historic cars will be profitable investments.
Elements including rarity, brand, age, image, and desirability can influence a classic car’s worth.
Some brands, like Ferraris, have a tendency to increase in value and make insane profits. Additionally, other brands in your portfolio of alternative investments that were previously neglected may suddenly increase in value.
Some of the most current sought-after vintage cars include:
- Ferrari 250 GTO
- Porsche 930 Turbo
- Mercedes-Benz 300SL Gullwing
- Ford Bronco
6. Art
When considering unusual investments, art definitely is the most popular.
However, not all art is a worthwhile investment. You should also start off as a collector rather than an investor. This way your love for art won’t override the desire to make a profit.
Invest in something you genuinely love if you want to keep it for the long run. The artist should have signed the original version of this. Obtain authenticity certificates, and keep your receipt as proof of purchase. Your artwork will also look better and be more protected with high-quality framing.
While contentious or politically charged items with historical significance will undoubtedly get a lot of interest from potential buyers, iconic personalities or images typically retain value. A safer investment is in the artist’s notoriety.
Emerging artists’ work may have greater upside potential, but it also carries a risk of loss, mainly if the artist never achieves popularity.
7. Investment-grade stamps
Stamps classified as investment-grade are those with the potential to appreciate in value.
Only a tiny portion of stamps are expected to increase in value, as rare as they are. Additionally, they must be in immaculate shape.
Stamps that are considered investment-grade are rare investments with potential growth. However, they should only be used by investors who are completely prepared financially.
As an illustration, it is said that Bill Gross, the founder of the financial management firm PIMCO, spent between $50 and $100 million of his $2 billion fortune on stamps.
At a charity auction, Mr. Gross sold a small fraction of his collection for four times the amount he paid for it. When asked about the proceeds of his sale, Mr. Gross said they were “better than the stock market.”
8. Wines
Most wines aren’t good long-term investments, and it’s doubtful that you’ll find one with notable profits.
However, over the long term, usually at least five years, investment-grade wine has a decent possibility of increasing in value. It is yet another illustration of a pleasant purchase.
But purchasing a wine collection comes with a number of difficulties, from sourcing to storing to marketing. Get it properly, and you can gain some cash. However, you can enjoy your bottle of wine even if you get it wrong.
Final Thoughts
Unusual investments offer greater portfolio diversification and lower overall risk with the potential for higher returns.
As unusual investments become a larger part of the investing landscape and more available to different types of investors, it is important that you understand the risks involved in investing in these types of assets.
Carefully study the unique characteristics and risks of any unusual asset.
Also, you have to be extremely patient and of course, have passion for the type of asset. Because if there is anything unusual investments have in common, it is that they don’t offer quick returns.
