When most people think about investing, it calls to mind stocks, bonds, and other traditional options. These days, though, people are also investing in all kinds of non-traditional assets and finding ways to make money from the things they value, such as works of art, classic cars, or fine jewelry. People who choose to take this route are engaging in what’s known as passion investing.
What Is Passion Investing?
Passion investing involves owning non-traditional assets that are expected to increase in value over time. This type of investment is speculative, so there’s no way to guarantee a return, but it offers a good way to diversify a portfolio and satisfy investors’ personal desires.
Passion investments tend to do well during times of economic uncertainty. Because durable passion assets tend to appreciate in value as they age, people often view them as more tangible and valuable than stocks and bonds in uncertain markets.
The Advantages of Passion Investing
Because their values don’t tend to rise and fall on the same schedule, passion investments make an excellent hedge against unfavorable markets for more traditional investments. The demand for these items tends to increase over time, which means that passion investors almost always see returns. Plus, since more people than ever are expressing an interest in passion asset classes, the items are more in demand now than ever and have only increased in value as a result.
Arguably the most important benefit of passion investing over traditional investments is that it allows people to truly enjoy their wealth and use it to fulfill personal dreams. It’s about more than just making money, although that’s still the primary goal for most passion investors. Passion investing is also a rewarding choice for anyone with a dedicated interest in high-value assets.
The Most Common Types of Passion Investments
Some people assume that passion investing is only for the extremely wealthy. Thankfully, that’s not the case. There are plenty of opportunities that fall within most people’s means. They include:
- Works of fine art
- Classic autos
- Stamps
- Coins
- Antiques
- Fine jewelry and watches
- And more
Because the popularity of passion investing has been on the rise in recent years, some firms have taken a novel approach. It’s now possible to purchase shares in many of these asset classes, opening them up to average investors who don’t have the money to purchase items like works of fine art independently.
Masterworks is one excellent example. The company selects artist markets that have a lot of momentum, acquires the art at fair prices, securitizes it, and holds the painting for three to ten years. Once that happens, investors receive pro rata proceeds, and everyone wins.
How to Choose an Asset Type
The best thing about passion investing is that it allows investors to put their money towards items that they value. It’s always best for newcomers to these markets to choose items that they are knowledgeable and passionate about. While each asset class has its pros and cons, investing money in one’s true passions always feels good. Investors should read more about the available options before deciding where to put their money.
