Thursday, June 21, 2012

Move from financial assets to hard assets

Uncertainty economic makes the investment return is not good. A certified deposit just give 2% interest rate per year that is far from inflation rate. The stock return is also not good in past decades. Some investor who invest for short time does not get the appropriate return.
Being worried by next bubble dotcom that loss some investor money, some clever investor remove their financial asset to hard asset. Hard asset is different with the financial asset because we can hold the asset. Meanwhile, we just hold the paper for financial asset. We have the part of the company by holding some paper.
Some investor change the investment to hard asset. They do not want take a risk with the stock. Some woman buy fashion collection such as famous brand handbags that they can wear it and sell whenever they are bored with it. This is not a profitable investment, however, it is better than investment. Woman also like jewelry especially gold. This shine yellow metal can be made become ring, bracelet, necklace, and ear stud.
The gold is stable and can give you high return but jewelry is little bit different with gold. The fabrication cost is high and most jewelry store will buy cheaply.
Most investor will prefer gold bar that value is very stable. Gold has been increasing recently due the dollar weaks and high inflation. Some investor are worried with uncertainty United States economic that looks not end. The gold bar is liquid and we can sell it at jewelry store, gold store, and others.
Silver may be a good option for hard asset. The silver increases is higher than gold increases. In last this year, silver increases 127%, gold increases to 28% and Palladium increases 58 %. some investors increase the percentage of precious metal in precious metal from 10% to 25%.
The gem stones that people use for it for jewelery is also good for the investment. The polished diamond increases 13% in past twelve month.  You can also invest at other gems such ruby and zamrud (emerland).
However, hard asset is not liquid as stock. There is no stock exchange for the hard asset. Keeping hard asset in house is also risky. That is why people keep the hard asset in safe deposit box that guarantee the assets. The asset owner should pay the cost of storage and insurance around $13,000 for a million hard asset every year.

No comments:

Post a Comment