the watch of time

Among the reasons people build collections are lifestyle and for investment asset diversification.

The latter category does not necessarily come to mind as motivation, at least not initially.

Like with so many aspects of life, the more one sincerely is interested in a subject, the more
likely one is to do well with it.  How many times have you heard the mantra to ‘find and pursue your passion’? Applying to more than hunting for a career per se, there are many examples of personal passions evolving into successful business enterprises.  Passion plus persistent spadework can build a valuable collection, which in turn whether intentionally or not provides asset diversification.

It is clear that, amongst the staggering plethora of ‘reality’ television shows nowadays, collectors have their place, be it via the road show appraisal or barter scenario, or the secret stashes of celebrities.

Why is the accumulation of non-investment assets an important consideration?

We have seen that, both short term and long term, dependence on investments alone for building and keeping wealth has been and continues to be a dicey proposition.  It is very difficult for the average person to maximize wealth creation through invested savings on their own, which explains why Canadians (according to repeated surveys) do better working with a financial consultant.  While one’s mix of asset types depends on time frame and risk tolerance, even a well-developed game plan does not isolate the investor from the vagaries of stock market turbulence or the tightness of income-based returns during this long period of low interest rates.

ADVISOR’s EDGE, a monthly magazine for investment professionals, through a fascinating series of articles, has looked at the potential of ‘atypical’ investment options, such as baseball cards, watches, wines and whiskies, antique furniture, and classic cars.

In Part 4, we’ll explore the opportunities and challenges of these ‘out of the box’ types of collections.