Currently investors and economists would say BitCoin or Tesla are the most profitable stocks that have outperformed like no other in history. Yet, they are just hot unicorn companies that are still speculative and havenât been profitable prior to 2020 so they can be immediately ruled out from the past 2 centuries, let alone, last few months.
Now as enticing as these stocks sound, they are very dangerous to be a part of your portfolio as an investor. Iâm not saying this because I donât have $200m worth of BitCoin waiting for me 2 password tries away, rather because no long term, real investor would approve of these shenanigans. When we play the game of the stock market, we arenât focused on the future as much as we are on the quick daily returns. This is the most dangerous part about investing and why most are not suited for it.
The stock market isnât for everyone. Itâs almost free to try out and test but the profits arenât for the greedy day trader types. The main purpose of investing isnât to make a hefty profit to buy more stuff and show off. Whenever you earn your deserving paycheck or make some extra bucks from babysitting, you should pretend itâs not even there. Make it invincible because you will make more that way than the suckers out there that cherish it and believe it is worth more than it really is.
So who is the stock market really made for?
Whether you are white, black, Russian, Guatemalan, you name it, anyone can take a nice piece of the earnings pie and can easily rely on the stock market to substitute their main income. Yet to do so, lucrative, long term investments make up the majority of their portfolio, no such thing as electronic currency or hip and eco-friendly cars in sight. A lucrative investor cannot afford those risks and expect a stock to rise 300% each month. That is unrealistic hence not profitable.
Iâll let you in on a little but obvious secret. The most profitable strategy is to let the market do its thing for at least a few months with no hesitation in obsessing over it.
As the investing legend Warren Buffet stated:
âOur favorite stock holding period is forever.â
There is no doubt all of our intentions are the same. We want to make quick profit, share it with no one, tell everyone how much we made but not how and continue with our risky schemes. No wonder rich quick doesnât exist.
The Secret Escape
But what if I told you thereâs been a secret and legal investment that has been hiding in your home for years that doesnât include your home itself?
And when we think about the stock market, the five asset classes come to mind are stocks, bonds, cash, real estate and commodities. Real estate is by far the largest portion of the richâs portfolio. The 1% own more land and homes than 200 Americans combined because it is almost guaranteed to appreciate, even surpassing recessions and the housing collapse. But since real estate is ALMOST guaranteed, Iâm here to let you know there is a FOR SURE guaranteed investment that doesnât require you to deal with renters, carpenters, lawyers, brokers, pesky fees and those cockroaches in the drain.
The rich invest in unordinary items that most donât consider because they make more than the rest.
Following the phrase, âout of sight, out of mindâ doesnât always work in your favor especially when trying to stand out of the crowd. Your best bet is to move farther away from it.
Letâs look into it.
Alternative Investments That We All Miss Out On To Score Big
Weâve all heard of the classic side hustles of drop shipping to selling Babe Ruth baseball cards and storing Lambos from 1945 and never starting the engine since driving them off the dealer lot and selling them for more than the average house in LA, roughly $800k, yet, there is even a more time efficient way to make more. Compared to this investment, these are seen as unique, ordinary ways to make an extra few bucks but the least, underrated thing that we all enjoy somewhat of in our homes consists of creativity and history.
Art.
Just like with antiques, artâs value has skyrocketed over the years and especially now during the pandemic when designing our homes and redoing the bathroom are on our to-do lists, art has never been more popular according to dealers and auctions that have never seen more record sales of Picasso and Monet since the 1980’s.
But even if you canât dish out a couple million on a painting that represents a single brush stroke, there are thousands of paintings that are as good and even look better than what a child could paint.
Art is unlike any investment because it is up for interpretation and there is no such thing as a bad deal. The value isnât set by a bank, government, the company or shareholders, rather by the public and their taste.
The highest bid gets two dictate the price or if the artist is still alive with their left ear still in tact, they get to decide where they want to sell it and that will hint the price. But the price and piece of art isnât truly valued upon what itâs worth until the artist passes away because it can never be replicated. Yes, even a simple line that a baby can do in 2 seconds cannot be replicated.
So how precious is art to your bank account and home?
Blue-chip art has outperformed the S&P by 180% from 2000â2018 (Source: Artprice).
A recent Deloitte survey showed that 86% of wealth managers recommended allocating a portion of their portfolio in art.
There are a variety of outlets to choose from to invest as little as $1k in art.
The most popular site, Masterworks(not sponsored or paid) allows you access to buy and sell investments in paintings by artists like Banksy and Basquiat with 10â25% historical appreciation. Minimums starting at 10K. If you are looking for cheaper options, head down to your local farmerâs market or antiques road show, youâll be surprised what youâll find!
And the best thing is, art isnât invincible! Compared to stocks or boring bonds, uou can actually hang it up and look at the masterpiece for years to come.
But as with every investment there are pros and cons. So letâs make sure to go over them both because your portfolio is on the line after all.
Downsides
-Expensive
-Needs storage and or space
-Pricey to handle and transact (dependent on what you want)
Upsides
-Rarely devalues
-Timeless
-Hard to break or steal compared to jewelry, gold or any other precious antique that is small in size
-Art is for everyone, baseball cards, not so much
-Can never be truly replicated no matter how hard you try
-Doesnât fluctuate in price based on the economy and consumer demand, always has risen in history
-What you want will look nice, I hope and can be sold at anytime with no capital gains tax charged on top
-No taxes, fund manager, annoying renters
-1 time payment, no mortgage
-Variety of choices to choose
-Real art isnât hype or trendy, classic art is always in demand
-No fixed cost, up to you to decide how much you want to pay
-Variety of outlets to purchase art. The more research you do, the better deals available
Whether you are an art enthusaist or havenât held a brush since Kindergarten, art is made for everyone. It certainly can cheer us up and make investing even a more rewarding, peaceful, comical, you name it part of our lives while also making returns at the same time.
Iâm not saying that you should go hoard all the art you can find and sell it one day to let you grandchildren live off of their trust full of art you sold, but it certainly isnât an investment you can miss out on, especially if your home needs a little spice!