A fixed investment in economics refers to investing in physical assets such as land, property, vehicles or any physical assets such as artwork. With interest rates at an all time low people are looking for profitable but secure ways to invest their money. There is risk in everything we do; even walking out the front door carries a certain amount of risk.
However it’s managing the risks we take and minimising them that is the key. Investing in something we know nothing about carries more risk than investing in something that we have knowledge about. Investing in classic cars is a popular and fun way to make or lose money. The classic and exotic car market boomed famously in the late 1980’s only to fall to Earth in the early 1990’s with some prices collapsing by as much as 40 per cent. This time, however, it’s different due to rising economies such as India and China where interest and money are real. Therefore there are more buyers after the same amount of cars which will potentially help to push the price up. So, the real question is do you love classic cars enough to invest in them, keep them in a secure place and fund the upkeep for 5-10 years whilst hoping you will make a good return when you come to sell it if your heart will let you?
Investing in art
If you haven’t studied art, it can be difficult to decide where to invest your money when it comes to the creative industry. The other option is appointing someone to invest for you who knows the area you are investing in very well and has experience in that field. The global art market is booming, but investing in art comes with substantial risks. Given the income being paid by more traditional assets such as bonds or savings accounts the interest is understandable, and with a 7per cent year-on-year increase which is a little above the 2007 high of £35bn. At the highest end of the market a painting by Post-Impressionist artist Paul Gauguin fetched an astonishing £197 million, the highest price ever paid for a work of art.
Research suggests that at the more realistic end of the market, investors can expect an average compound return of around 4 per cent, on investment-grade art, held for between five and ten years.
Investments don’t always have to be long term to provide a good rate of return as proven with Bridging Finance.
As we have stated in previous newsletters, investing in UK property provides some of the best security in the current marketplace and your investment can be in and out within the year if you choose or can be compounded over 5 years or longer. Some property commentators believe that as we live on an island with an ever increasing population and a shortage of land the property market looks set to keep on rising!