We often discuss the fact that as an expatriate you have a very real advantage over your peers back home onshore in the UK, or wherever. This is because of a change to your taxation status and the fact that you can legitimately make the very most of offshore investing, saving and banking opportunities.
However, we’re well aware that despite the fact expats have this advantage, even offshore the rates of interest available are less than inspiring, and investment based returns from bonds or funds for example have been fluctuating in fortune as globally speaking, banks attempt to rebound from the credit crisis.
Therefore, if you’re bored of offshore bank based investments it’s good to know that there are many exciting alternatives for your money! In this report we take a look at how you could diversify your own portfolio through direct purchases in the art world, to investment in a vintage wine fund for example! Basically, if you’re looking for greater potential returns and are willing to open yourself up to greater potential risk, read on to see what options are available.
There has been an increase in interest in so-called tangible asset investment ever since the likes of the Madoff scandal and the banking crisis have really become known about. Investors are less willing to accept that their money is safe with a bank and are looking at ways to spread their risk through the diversification of investment approaches. Therefore, anything from art to jewellery, from classic cars to vintage wine have become targets for professional investors looking for tangible assets that they can watch increase in value.
If you like the thought of getting into such an investment mindset but don’t necessarily have the millions that some investors spend on a Picasso or a special diamond, there are wily ways that you can go about it. Firstly you can try and find an up and coming artist and invest and support their work. This requires a great deal of research as well as perhaps a gut instinct. Go for originals by the artist rather than prints – even if you can only afford one original as opposed to a handful of limited edition prints.
Believe it or not you can also ‘invest’ in desirable jewellery thanks to the likes of eBay…Tiffany is a popular high end brand that sells well on eBay and if you’re careful to hunt down a bargain priced, brand new item with all its original packaging, you could have just purchased yourself a tangible asset for under market value. You can hold it if it’s a classic piece, or just resell with a higher reserve if you want to ‘trade’ and increase your profit.
Apply this approach if you prefer to shop around market stalls or antiques shops, do your research carefully and don’t necessarily trust shop-talk or even a hallmark. Alternatively, if you want to invest in wine – and it can be a very good investment if you get the right variety, the right vintage and the right source, you can ‘get in’ more affordably with a wine investment fund though, and then you can avoid the worry of making sure you’re storing your wine properly! According to Andrew della Casa, a director of the Wine Investment Fund who was speaking in the Telegraph last week “The Liv-ex 100 Index, the industry benchmark index produced by Liv-ex, the fine wine exchange, rose by 2.8 per cent, its largest increase since June 2007.” The aim of this fund is to generate double digit annualised returns by predominantly investing in Bordeaux, and you will be glad to know that the fund actually holds a physical stock of wine in a UK Government bonded warehouse.
Property is of course the other tangible asset than many of us are well aware of – and the time is considered by many to be ripe at the moment for an investment in real estate. Markets are flat as finance is non-existent, buyers are restricted with this lack of finance and by fear of making a mistake and buying before a market has bottomed out, and at the same time you have vendors under stress to sell. For a cash buyer or one who has financing in place, it’s a great time to look at the opportunities available.
You can buy to let at home or abroad, or you can buy with a view to adding value and re-selling. Gone are the days when you could buy off plan and flip easily for profit – but property located in a place where there is sustainable demand is a good potential investment. Just make sure you buy well in today’s fragile market environment – i.e., haggle very hard and know that you’re in the strongest position.
Expatriate investors have many options available to them – of course they have the regular offshore investment, saving and banking route for a more traditional spread of investment featuring a range of risk/return balanced products and solutions. But expats are often in a great position to also see new and exciting opportunities around them as they travel, get to know a new nation and sniff out potential where others may have overlooked an opportunity.
If you want advice about all your investment options, you can always get in touch with us for no obligation advice and support from our strategic partners…otherwise, happy bargain and investment hunting.
