These Investments Are Never Going Out Of Fashion

The investment world tends to go through various fads, perhaps most recently seen with the rise and fall of cryptocurrencies. 

The rise and fall in popularity of different investments reflects human nature as investors are always on the look out for new places to earn returns for their money .

Over the long term global equities can be very attractive for returns above inflation but investors also look at other asset classes, with some that are never really out of fashion. Let’s explore them here. 

Real Estate / Property

Fans of this asset class argue that people are always going to have to live in houses.

Real estate benefits from the fact that it is fundamental to the economic system. Banks rely on mortgages to fuel their businesses. Central banks keep interest rates lows so people can continue to buy them while propping up asset prices. This pattern of activity increases lending throughout the economy, pushing the price of existing houses up. While the government public says that it is doing all it can to keep property prices low for first-time buyers, it actually likes rising real estate costs. When property prices are rising, homeowners feel wealthier and assume that their finances are doing better. 

Bullion / Gold

Bullion has been around as long as the property market, and possibly longer. What’s more, proponents of gold argue it’s one of the safest investments you can make.

As Gold Bullion Australia points out, gold and silver are hedges against currency risk. Governments are liable to create new money and flood the system with it at any point, thereby diluting the value of money in your savings account by diluting the total supply. 

The supply of gold and silver, however, is almost fixed. Mines add new supply to the market every year, but it is only a tiny amount – usually about one or two percent. Thus, gold is probably the only form of currency you can store under your mattress forever, and its likely to not have lost value. 

Remember however that gold is not a productive asset. It won’t earn returns like stocks or bonds. Instead, it’ll provide the cash portion of your portfolio with inflation protection. If prices go up across the economy, you can simply sell off your gold to release cash, pocketing the difference. 

Art

Finally, art is another investment that will probably never go out of fashion. Owners of original pieces know that buyers are willing to pay a fortune to hang them in their homes. What’s more, as the number of wealthy people in the world rises, the competition for such objects will also increase. That said, it will only be worth what others are willing to pay, so there is the potential for losses too.