Tangible assets as investments
Tangible assets are items that, due to its specificity, it is understood that over time increase its value. This group includes stamps, jewelry, artwork, old documents, books and precious metals like gold.
This investment option has its risks, as these assets may be revalued or, by contrast, lose value in the market for the effects of it.
Investment in tangible assets is not new, since it has been used throughout history, usually in situations of instability and crisis. The revaluation of these objects usually increases gradually with the passage of time since it is scarce physical goods are in high demand. But it may be the case that investors do not make profits or lose money for the purchase of these goods.
It is necessary that the object in which it invests meet a number of features to be considered a commodity. Among them is that which is not sufficiently valued when buying, which is expected to increase in value over time and to provide a value to the collection, in the case of stamps or the like.
In short, the value of these goods is “consensual.” Depends on the demand and supply exists on them. The art works are revalued generally the time, but it may happen that an author goes out of fashion and their works lose value, for example. This is the main risk of investing in tangible assets.
When we seek investments that offer high profits we have to understand that the risks are also high. The investor has to accept the highest or choose other methods that pose less risk of capital loss, but the latter have a lower yield.
It’s about being fair, no one offers “hard to free lunch” and if we want to make money quickly, we must be aware that we are in danger of losing our investment.