Alternative ideas to get consistent returns

Hedge funds provide a wide range of asset classes where one can generate returns when the market undergoes volatility. This is why hedge funds are considered - Targeted absolute return funds. Private equity involves buying in private firms and buying out public companies.  

Several companies manage such funds where the investors have been paying a minimum fee to receive a share in profits generated through the endeavour. Alternatives permit diversifying risks by adding layers of protection against market volatility. 

Diversifying uncorrelated assets where the category has no close link to the stock or bond markets provides stable returns. It limits the portfolio from losing even during the financial crisis. 

Investment intangible assets

Some traditional and nontraditional investments provide a way to protect the market from losses. Experts have several suggestions for new investors. 

First, they should have a passion for getting such things and be able to afford them. 

Researching the asset class and comprehending how to protect/ensure the investment is necessary. 

Wine, precious stones, watches, stamps, and coins may require proper storage. Luxury cars may require an understanding of vintage machines for maintenance and sale.  

Storing such vintage cars may not be easy as it requires proper supervision to avoid decay in internal conditions. 

The maintenance and insurance of such items require higher expenditure, and the investors should be aware of these additional costs. 

Art is one area that is not invested principally for profit. It is mostly taken for aesthetic value. However, it is difficult to regain the value by selling an art piece because fashion changes in such asset class where a new artist's painting can get a higher value than a popular vintage. However, more than 30 per cent of the investment in art do so as they think the value will increase over time. 

Sometimes, even a small value put in a collectable can get a higher return in the long term; however, huge money spent on an expensive luxury asset class may not get even the original price. 

Risks and issues 

The motivation should be to buy things as a hobby. One of the key queries in this area is determining the price of a luxury asset class. 

All conventional assets like bonds and stocks have a specific market value that the buyer can pre-estimate. Still, nobody can pre-estimate the value in the case of a 100-year-old wine bottle or an artwork by 18th-century popular artists. 

The number of buyers interested in the item determines the price. Some items like a piece of branded jewellery or coin, part of a complete set, maybe in higher demand as the bidder wants to build a comprehensive set of coins of a certain era or get a diamond earring that was part of an imperial jewellery collection.