What is an investor to do? With market uncertainty, alternative investments are proving popular. But where to invest and in what? I asked some experts
From Hockney to Banksy, gallerists are constantly on the lookout for the next extraordinary talent. Rosemarie Noone runs the Claremorris Gallery and says art is a fabulous investment, “because if you buy what you love at a price you can afford, you cannot lose”.
That might be easier said than done, but she says art is traded no differently to stocks and bonds, while digital art (or NFTs) have become “indistinguishable from currency”.
Only the very rich, “will speculate on artists with stratospheric success such as Genieve Figgis or Sean Scully”, she says.
“Start by visiting galleries with strong reputations, and by looking at good art. Begin with public collections, get a feel for what you like. If you have a few thousand euro to spend, buy work by mid-career or established artists and if your budget is tighter, limited edition prints can be great investments on a lower budget. Trust your gut.”
Collectibles
Rooting around at carboot sales can provide the first foray into an interest in collectibles.
Herman & Wilkinson’s associate director Ross Ó Súilleabháin says his rule is also to buy what you like. “If it goes wrong, at the bare minimum you like what you’re holding.”
Coins have always been popular because they have intrinsic value. “But collectors also diversify with Irish silver flatware, Georgian is very collectible.”
Jewellery is often bought at auction because there’s less of a mark up (around 20pc). “But you’re competing against the actual value of the item, you’re looking to buy items near their net worth,” he says. “That’s what you’re banking on. Over a period of time, you’re hoping a Bulgari ring for €2,000 will still be popular in 10 years. Vintage 40s and 50s stuff has come full circle.”
Personal hobbies can beget a business.
“Pokemon cards are very popular bought online in batches, of say, 150 where you’re sorting for ones of value and sending them off to be graded for quality, rarity and condition. You could spend €150 and find a ‘sleeper’, now worth €15k. It's a bit of a trawl, but essentially you want to find one you think has been graded wrong, snap it up and you could make a fortune.”
Gold
Gold has been a valuable asset for thousands of years, and was the standard by which currency used to be backed across the globe.
“It’s tangible property, which means it’s detached from the economic system,” says GoldCore CEO Stephen Flood. “It doesn’t rely on cash flow, dividends or yields. It is nobody else’s liability. It’s valuable and gives financial sovereignty, it is the ultimate form of money in your possession that can be transacted anywhere.”
He reckons it’s more stable than cash.
“It’s the wholesale printing of money which got us to where we are today; it’s constantly being debased,” he says.
Like all commodities, taking the longer view is essential. Since 2002 the annual return is 8.3pc per annum against the euro, up to 12pc per annum globally. Mr Flood says you should buy for delivery or storage. “We store gold in London, Dublin and Zurich, on a segregated or allocated basis in specific bars or coins, separated from other clients.
“So if you ever want it, it can be shipped in three days, fully insured.”
Green energy
Brendan Costello of Galway-based Talk Financial says once your risk profile and basic financial needs are met, an alternative option is an energy fund.
“An insured fund’s mandate is to buy into companies looking at the development of hydrogen, oceanic power, wind, raw materials etc. People want to avoid oil, fracking and all that, but companies like BP Oil are spending billions on alternative energy research – more than on oil drilling. They have very deep pockets.”
From a market perspective ESG (environment, social and governance) investing is really popular.
“It’s an evolving process and a good fund manager will place money wherever the highest return is. Most people don’t consider the ‘ethical’ part of their portfolio until you mention it to them, but when you do, they want to embrace it. But only when the yield is there.”
Healthcare
Investing in your future health can be a good way of protecting yourself.
“For those who can afford it, gold-plated health insurance options available typically cover private accommodation in every public and private hospital in the country, including the high-tech Blackrock Clinic and Mater Private,” says Dermot Goode of TotalHealthCover.ie.
“As well as superb accommodation cover, they include excellent refunds on a range of eligible out-patient expenses with no excess and some provide full cover for certain private A&E clinics. Consider VHI’s Premium Care scheme at €4,000 per adult, Laya’s Empower Secure scheme at €4,828 or Irish Life Health Plan 09 at €5,493.”
What next for cryptocurrencies?
Cryptocurrencies were originally promoted as a secure and global means of making payments but became popular among young and non- professional investors, especially during the Covid lockdowns.
Rising crypto prices became self- fulfilling, drawing in new money that pushed up prices and attracted more cash, often through phone- based apps.
Last year, the Central Bank Governor Gabriel Makhlouf compared the most popular crypto asset, b itcoin, to the Dutch tulip mania of the 17th century, the classic asset bubble which coincidentally also inflated during a plague outbreak.
Bitcoin, has lost 70pc of its value since last November. The entire market is feeling pain, and many investors are nursing huge losses.
Views differ on what will happen next. For Brendan Costello from Talk Financial the question or whether or not to buy is easy: “It’s crazy. Crypto is insane.”
Jillian Godsil, editor of Blockleaders.io, a crypto-focused website, says nobody should invest what they cannot afford to lose. “It’s the same with all investments, crypto or regular. People bought bitcoin at say $40,000 and saw it go up to almost $70,000 and today it is hovering around the $21,000 mark, so on paper you’ve lost money, but only if you cash it out.”
She adds you should be prepared to wait, and it might be enough to buy a holiday in time to come. “If you need it to pay for a car loan, you don’t want it to have gone down.”
