One of my New Year’s resolutions was to further diversify my asset portfolio. On the real estate side, I try to add one property to my portfolio every year. But, my portfolio is 95% real estate… I own very few stocks or other assets… Which, as a stockbroker once told me, means I’m not really diversified. I like real estate. Property is a sound investment that tends to significantly rise in value over time (and more consistently than the stock market)… It also provides regular cash flow through rentals. So, real estate has been my number-one choice for growing my wealth. I was OK with that for a long time. But, as I get older, I want more liquidity. I started to grow my stock portfolio. But my problem with stocks—and even mutual funds—is that you have to pay a lot of attention to them. The market is more volatile.Nevertheless, my stockbroker colleague would be proud of my progress…I’m branching out into other assets, too.
Coin Collections
A few years ago, I started a coin collection with the help of a group that speaks at Live And Invest Overseas conferences, International Coin Alliance. That portfolio is slowly growing… but I don’t put a ton of money into it. It’s part of my Plan B should the world turn to chaos and paper money become worthless. Another alternative investment I’ve dabbled in over the years is wine… I first bought some primeurs while living in France almost 20 years ago. I still own most of those. They’re too expensive to drink, and it’s too much effort to sell them (and I really don’t need to sell them). The kids will probably break some of them out for my funeral… I add to my cave here and there from time to time. I’m on the hunt for even more ways to diversify.As you can probably guess, I like assets that I can touch and feel. That makes them real to me. Tangible value. Stocks are not my forte… and neither is crypto or NFTs. It’s not for me. But, other hard assets… I’m always open to those.
Art Is An Alternative Investment
This year I decided to start adding some artwork to my investment portfolio. We own some nice art pieces that are on the walls. Most of them are likely worth more than we paid, but we didn’t pay much and the artists aren’t “known”… and those pieces weren’t meant for investment. They were meant for lifestyle, i.e. looking good on the wall next to our furniture. The art I’m interested in buying now that the walls are all full is investment art. The problem is… I don’t know anything about art investing.Therefore, I’ve sought out professional help (my wife says I need it for other things as well)… I’ve found two resources so far (for help with the art… not my other issues)… A gallery in the U.K. that offers turnkey art investment services, and a friend of my daughter who works in a gallery in New York. The U.K. gallery sources the artists and artwork, stores the art, and suggests when to sell. The minimum hold time they recommend is two years. They have no upfront fees (although I’m sure a commission for the sales guy is already in the price I’m paying) and no storage fees… just a backend upside fee of 20% of the profit at the time of sale. That’s just like a hedge fund, which I presume is how they came up with the model. I just bought my first piece. Now, I’ll wait at least two years to see what happens… Meanwhile, I’ll keep looking at new pieces they send and will likely buy a couple a year.The low-end entry point is less than what I know some people pay for “cheap” designer watches, so it’s not big money… yet. If the gallery can prove itself, maybe at some point in the future I’ll buy more expensive pieces. That would be a way to diversify assets.Who knows? Maybe in five years I’ll have an art collection that could be put up for auction and I could make a killing. A couple weeks ago, Hong Kong billionaire Joseph Lau sold 76 Hermes handbags and 1 Chanel handbag at a Sotheby’s auction for US$3.2 million. Maybe Hermes purses will be my next alternative investment.I know my wife would like that idea. Stay diversified, 
Lief SimonEditor, Simon Letter
