10 Most Valuable Stamps of All Time


Collecting rare stamps as an alternative investment has not been a bad strategy to follow if you know what you are looking for.

When you compare the auction prices achieved by some rare and collectible stamps and their respective values, the average rise in value has been about 3% over a 12 month period but and near 200% increase in values over a ten-year period.

This compares very favourably to the performance of the FTSE 100 for example, which has managed to show a 51% ROI over the same ten year period.

Here is a look at the ten of the most valuable stamps in the world and their story, which might just inspire you to include philately as a viable alternative investment strategy.

Penny_black10. The Penny Black

The most obvious starting point and probably the most iconic stamp, which you may have heard about even if you have taken no interest in stamp collecting to this point, is the iconic Penny Black.

This stamp was first issued in 1840 by the British Postal authorities and unused Penny Black’s are extremely rare to find or acquire. You can expect to pay somewhere in the region of $3,000 for an unused One Penny Black stamp and collectors everywhere want this in their collection.

There are a number of used Penny Black’s still in circulation, but it is the unused ones that send the price soaring.

2d-blue9. The Two Penny Blue

Issued around 1840, the unique aspect of this stamp is the fact that it is not only one of the earliest stamps issued in Britain, but it also has a curiosity value because it lacks the country’s name on it.

A rare Penny Blue sold for nearly $4 million back in 1993 and the reason why it easily makes the top ten is actually far more valuable than the iconic Penny Black, is that it is ten times scarcer to find.

PennyRed8. The Penny Red

Next up is the Penny Red, which is the most expensive stamp that well-known dealers Stanley Gibbons have sold.

It fetched £550,000 when it went under the hammer, despite the fact it was in poor condition. The main reason it fetched such as high price is that there are only nine in the world and as the Post Office destroyed the printing plate, there is never a chance of any more appearing.

US_Airmail_inverted_Jenny_24c_1918_issue7. The Inverted Jenny

One of the reasons why some stamps fetch such astronomical prices is not just because of their scarcity but also due to the fact that an error has been made on a few that went into circulation.

The Inverted Jenny is a case in point. It is quite obvious what is wrong with this stamp and because they recalled as many as possible, the ones that remain are considered valuable by collectors.

Screen Shot 2015-11-25 at 17.34.336. The Roses

These stamps which are referred to as the Roses Error, were produced in 1978 and due to an error, the 13p postage price failed to get printed on the stamp.

That 13p has now become £130,000 as there are only three of them in the world. Although the Queen two of them and a private collector has the other one, so you are unlikely to ever get your hands on this particular rare stamp.

mauritius_one_penny_and_two_pence_stamps5. Mauritius Post Office Error stamp

Another stamp which has achieved notoriety and great value in the stamp world is the Mauritius Post Office Error stamp.

it is so-called due to the fact that the stamps had Post Office rather than Post Paid on them. An error which has added plenty of extra zeros to their value over time, since they were produced back in 1847.

Hawaii_stamp_13c_18514. Hawaii Missionary stamps

This little five cent stamp ranks right up there as one of the most expensive and collectible stamps in the world.

These were the first and oldest stamps produced in Hawaii and a stamp in mint condition or in a set, could fetch upwards of $100,000.

220px-Charles_Connel3. The New Brunswick Connell’s Folly stamp   

Postmaster General Charles Connell decided to use his own portrait on a five cent stamp and was subjected to a public backlash, as it was a move seen to be political propaganda.

This folly as it was referred to, made this rare Canadian stamp a controversial topic and has added to its value and collectibility.

China special delivery stamp2. The China Special Delivery issue stamp

This is the world’s largest stamp and is a rare and exclusive Chinese stamp that continues to increase in value as the years go by and more collectors seek out the chance to acquire one.

British_Guiana_141. British Guiana one cent Magenta stamp

This stamp is considered by many philatelists to be one of the rarest and most valuable stamps you can ever hope to acquire.

Considering that the last time one went up for auction, it fetched $280,000 back in 1970, current estimates suggest it could easily fetch north of a million dollars. There is considered to be only one genuine specimen left and perhaps not surprisingly, a number of counterfeit copies have been uncovered over the years.

What Are The Best Alternative Investments for 2016?


The financial markets have had to digest some shocks and turmoil during 2015, and as is often the case with many mainstream investors, the anticipation of how markets will react to these events means that fingers get burnt in the short term.

Trying to anticipate when the Fed and the Bank of England will start to raise interest rates has preoccupied investors and analysts for most of the last year, but if you are someone who has diversified their portfolio and embraced some alternative strategies, you may well be more concerned about how classic car prices have held up rather than how a behemoth like Glencore could see its share price fall so sharply.

How have Alternative Investments fared?

The jury is still out on 2015 and the final figures won’t be fully collated of course until the champagne corks have popped and celebrations to welcome in the new year have been and gone.

if you consider an alternative investment as something you can hang on the wall or store in the garage or wine cellar, you will probably be paying close attention to how your investments have fared in comparison to the FTSE 100 index.

The Knight Frank Luxury Investment Index is an excellent barometer for illustrating investor appetite as well as returns on certain luxury investments. The index below covers 2014 and also looks back at how your investment in assets such as art, cars and wine have fared in comparison to if you had put your money in the stock market instead

These figures have been reproduced from the Knight Frank Luxury Investment Index.

Investment                                     12-month               5-year         10-year

Stamps                                             3%                         34%             195%

Jewellery                                          0%                         39%             163%

Coins                                               10%                        90%             221%

Art                                                     5%                        17%             226%

Wine                                                 3%                         45%             226%

Cars                                                25%                       111%             469%

Gold                                                – 2%                        36%             254%

FTSE 100                                          9%                        59%               51%

These figures make for interesting reading and are based on actual auction price data, demonstrating that the market for luxury alternative investments is proving robust and more than able to provide long-term growth if you choose your investments wisely.

Cars have performed admirably with a 469% return over a ten year period and gold, whilst still proving to be extremely volatile, has still held its own over the period of a decade.

Research is key

As any savvy alternative investor will know, art and collectibles markets are extremely fickle and you have to do some serious research to establish which cars or artist is showing strong growth potential and which wines are the hottest property to add to your cellar collection.

If you take the classic cars market as an example, no smart motoring-enthusiast investor would part with their money before checking resources like the HAGI classic car index and accompanying analysis of those results.

It is far too simplistic to expect every old car that is considered to be a classic, to rise in value and show you a profit. Auction sale prices do however provide you with a good barometer of investor appetite in a particular sector like cars or art for example, and it does give you the chance to spot potential trends that you might be able to take advantage of.

Investing in art

Art markets have performed well in general during 2015 and over the longer term, there have been some very acceptable investment returns to be had.

With art, it is almost inevitable that some markets will become overheated and if you breakdown investments into certain specific categories, you will see that investing in contemporary art is definitely a long-term strategy.

It is probably to be expected that it might take time for investors to appreciate the true value of certain contemporary artists and that is a good reason why this particular market can only manage a general 4% growth over 5 years, which rises rapidly to 233% over a ten-year period.

If you wanted a quick return on your alternative investment in art, European 19th century art would have been the market to choose, with a 20% return over a 12-month period.

The outlook for 2016

The fundamental point to consider about the global investment landscape is that significant wealth is still being created in different parts of the world and particularly so with some emerging economies continuing to expand and some developing economies expected to show signs of recovery.

These economic conditions are creating a new financial landscape and is likely to fuel a growing interest in alternative investments, as new and existing investors seek ways to diversify their portfolio away from just relying on the highs and lows of the global stock markets alone.

This is why luxury alternative investments might be a good bet for 2016.

As more wealth is created in different parts of the globe, this will almost certainly create a growing number of investors who want to acquire some assets that confirm their wealthy status.

Being able to hang a prized painting on your wall or arrive in style in a classic car, or perhaps showing off your extensive wine collection in your cellar, are all becoming attainable targets for a new generation of well-heeled investors who are just experiencing a capitalist culture, maybe for the first time.

If this wealth-creation in countries like China for example continues apace, it could well turn out to be another profitable decade of strong growth performance for luxury alternative investments.

You might therefore decide that 2016 could be a good year for diversifying your portfolio and investing in some of these markets, provided you do your research beforehand of course.

Is the Shipping Container industry lucrative for private investors?


You don’t have to be a shipping magnate or even own your own cargo ship to profit from the shipping container industry.

We are all now consumers in a global marketplace and whether you are buying into the latest trend in wearable tech or have ordered a new tablet or even a car, there is a good chance that your purchase might have travelled the seas to find before eventually arriving in your possession.

When you look at the total value of seaborne trade in total, global seaborne container trade takes about a 60% slice of the total number and is worth well in excess of $5 trillion annually.

Bigger and better

Everything relating to the shipping container industry seems to be getting bigger, with the quantity of goods being carried by containers growing from around 100 million metric tons in 1980 to 1.5 billion metric tons being transported in 2012.

The volume of shipping is not the only thing that has increased, as the deadweight tonnage of container ships has steadily risen from an average of 11 million metric tons to around 198 million metric tons.

To give you some idea of the capacity, the global cellular container ship fleet had the capacity to carry about 15.4 million standard containers back in 2012, and with a total capacity of a little over 2.5 million TEU’s, the Danish shipping line APM-Maersk is the biggest container-shipping company in the world.

TEU is the Twenty Foot Equivalent Unit and is a fairly inexact unit of cargo capacity but nevertheless used extensively in the shipping industry to describe the capacity of each container ship and also to evaluate the capacity of container terminals.

Busiest ports

If you are thinking of shipping container leasing as an alternative investment, it is not only helpful to understand the use of TEU’s when looking at projections but it is also relevant to understand where the busiest ports in the world are.

Not surprisingly, China’s continuing economic development over the last decade is clearly illustrated when you look at at list of the busiest container ports in the world. (Courtesy of Statista)

Screen Shot 2015-06-09 at 07.47.25

Shanghai just edges out Singapore in terms of TEU’s and most of the world’s busiest ports are now found in China and you have to work your way down to 11th on the list before you come to a European destination, in the form of Rotterdam.

You might notice that the United States is not represented in the top 15 of busiest container-ship ports, although Los Angeles does actually come 16th, as they handled just over 8 million TEU’s of container traffic in 2012.

 Own your own shipping container

The basic principle of owning your own shipping container is relatively simple in that you acquire the container for an initial capital outlay or even rent to buy with some schemes, and then lease them out to be used to transport goods around the globe.

The cost of a shipping container is relatively low in comparison to some assets and a typical example would be to purchase each container for about $4,000 and then lease them to a company in the shipping industry to provide a fixed or annual return on your investment that should yield upwards of 12% per annum.

You would become part of a process chain that involves the company that is leasing the containers you own from you, and subsequently leasing the containers to a company in the shipping industry.

Fixed lease plan

When researching the investment opportunity yourself, you will no doubt come across several variations on the basic scheme of buy-to-lease and one of the popular options is a fixed lease plan.

If you want to lock in a specific return over a set period of time a fixed lease plan would be a good option to consider. This would involve buying a set number of containers and signing an agreement that offers to provide you with a fixed monthly or quarterly income at a fixed annual rate that is likely to be in the region of 12% per annum or thereabouts dependent on the terms and up-front purchase costs involved.

The operational lifespan of a container is normally a maximum of 15 years so you will will have to factor this into your sums and be aware that you are acquiring an income-generating asset that is also depreciating and has a reasonably fixed usability life.

You should be able to find a scheme that allows you to actually sell the container back for the full purchase price within three years, although most investors take a longer term view in order to maximise their return.

Payment terms might vary between the various schemes available, but if you buy at least five containers or more, you will probably be paid a monthly income, whereas owning less than five will probably mean you are paid your income on a quarterly basis.

You should be able to negotiate a discount if your interested in buying multiple containers and you will also need to make some enquiries with your tax advisor regarding your ability to claim depreciation against your income.

Shipping container leasing returns can compare favourably against other asset classes when you are looking at the risk-return aspect of the investment. According to Global Financial Data figures in 2012, Shipping containers offers an average 26% return on your investment over a 20 year period.

In order to achieve this rate of return, you would have to be more speculative in your investment strategy and look at an alternative to a fixed lease plan which offers the relative security of a set annual return.

Short term leasing arrangements

The way to boost your annual returns is to look at short term leasing arrangements, which is an aggressive strategy but often more financially rewarding.

This involves the leasing company renting your containers to cargo transporters on a short term leasing arrangement. As the container owner, you should receive about 30% of the net rental income although that figure is variable according to each deal that is struck.

The net rental figure is arrived at after deducting the costs of deploying the containers from the rent derived from the sublease.

You may find that despite the apparent flexibility of a short term leasing arrangement, the plan you choose from the various companies offering this service, will often be fixed for the life of that specific container.

if you want to diversify your leasing plans in order to generate different levels of return based on different leasing terms, you will normally have to purchase multiple containers and then negotiate the return that you want for each one.

Benefits of ownership

When you sign a leasing arrangement your container is fully insured on both land and at sea so any damage or loss sustained under risks normally associated with the shipping industry are covered and a replacement container provided under standard terms used by most leasing companies.

You have ownership of the container from day one and each one has a number plate and manufacturer specifications that enable you to identify each container. Your container should also be traceable and can therefore be located anywhere around the globe at any time.

Container ownership involves virtually no additional costs beyond the initial purchase price,as the costs associated with deploying each container are normally accounted for in the calculation of the net rental income being quoted.

Shipping container leasing can potentially be a profitable alternative investment and entry levels into the industry can be relatively modest in comparison to some other assets classes.

As you will have seen from the figures, there is continual growth in the volume of shipments and with container ships becoming increasingly larger, there will doubtless be capacity to fill.

This type of investment is not without its risks of course and you definitely have to exercise caution and due diligence when considering a leasing deal and arranging purchase of the container units themselves.

There are various investment forums with feedback from existing investors to check out and also take investment and legal advice from a trusted source. Once you are satisfied that you have an opportunity on terms that you are comfortable with, you should be able to generate a reasonable income through leasing out your shipping containers.

Is the domain name gold-rush over?


It is not always easy to get a handle on the true picture regarding the level and volume of domain names being sold, as a large number of high-profile domain name sales are handled by brokerage firms and the terms of the sale are not publicly disclosed.

Despite this drawback when trying to evaluate the overall state of health for the domain name market, we can still get a good idea of what is going on by taking a look at the sales chart published by DN Journal, which is the domain industry news magazine.

Perhaps indicative of where some people think there is one of the greatest opportunities to make money on the internet, porno.com changed was sold in 2015 for $8,888,88 (presumably the new owner considers number 8 lucky, although their identity is not known as it was a private sale)

You have to sell a domain for at least $45,000 to make the chart and that will only get you into a tie for 97th. Another interesting point to note when you look through the list, is how .com is still the dominant domain name extension, having been one of the internet’s original top-level domains along with .net, which were both introduced back in 1984.

A lot has changed since those early days and we have heard many tales of internet entrepreneurs making fortunes from selling a domain name for millions, having acquired it for a modest sum in the first place.

The top twenty list of the most expensive domain name sales that were publicly reported is testament to the potential lucrative nature of domain name investments and provide a reflection of what many connected to the internet are searching for, which is why the name has such a high perceived value.

  1. Insurance.com $35.6 million in 2010
  2. VacationRentals.com $35 million in 2007
  3. PrivateJet.com $30.18 million in 2012
  4. Sex.com for $14 million in November 2014
  5. Internet.com $18 million in 2009
  6. 360.com $17 million in 2015
  7. Insure.com $16 million in 2009
  8. Hotels.com $11 million in 2001
  9. Fund.com 2008 £9.99 million
  10. Porn.com 2007 $9.5 million
  11. Porno.com for $8,888,888 in Feb 2015
  12. Fb.com bought by Facebook for $8.5 million in November 2010
  13. Business.com for $7.5 million in December 1999
  14. Diamond.com 2006 $7.5 million
  15. Beer.com 2004 $7 million
  16. iCloud.com bought by Apple for $6 million in March 2011
  17. Casino.com 2003 $5.5 million
  18. Slots.com 2010 for $5.5 million
  19. Toys.com: bought by Toys ‘R’ Us by auction for $5.1 million in 2009
  20. AsSeenOnTv.com 2000 for $5.1 million

The “Domain King”

If you manage to acquire a reputation that leads to you being give a nickname of the “Domain King”, which is even a registered trademark for its owner, you won’t be short of opinions and a strategy that works.

Rick Schwartz is the man that sits on that particular throne in the kingdom of domains and when you read his blog, you will see that he doesn’t do sitting on fences when it comes to opinions on what works and what doesn’t with domain name investing.

Back in 1995, Scwartz started registering what can only be described as adult entertainment orientated domain names and he chose words and phrases that attract a lot of type-in traffic. All of these addresses go to a parking page, which is a web landing with links to advertising targeted at the demographic who are searching these terms on the internet.

A search engine like Google mainly, then gets paid for each time someone clicks on one of these sites that is advertising on the parking page, and people like Schwartz get a cut of the revenues.

This strategy got Rick Schwartz started on the road to making his fortune and ironically, he was earning money specifically from the porn industry, without actually being directly involved in it all.

The reason why he is called the “Domain King” is that he owns about 6,000 income-generating sites and whilst the income stream is enviable, the real big bucks are made from the sale of a domain name that is sought-after and offers an instant regular income for the buyer.

Buying up domain names from scratch and turning them into cash cows by building site traffic is not something everyone can be good at, but the combined strategy of buying domain names as the initial registrant and also buying domains on the aftermarket has been profitable for investors and entrepreneurs like Schwartz.

The question for anyone considering buying domain names as an alternative investment strategy is whether there is still money to be made or have early prospectors like Rick Schwartz seen the best of the gold rush?

Other established domain name traders such as Marc Ostrofsky, who wrote Get Rich Click! The Ultimate Guide to Making Money on the Internet, and is famed for stating that “domain names are the real estate of the internet”, concur with the views of Schwartz and think that the best opportunities are yet to come.

Others take the opposite view and think that the internet gold rush is well and truly done with.

Consor Intellectual Asset Management are one of a number of firms who carry out valuations of intellectual property such as domain names, and their owner Weston Anson, considers that “your domain name is far less important than it was a decade ago”.

His reasoning for coming to this conclusion is that search engines are now much smarter than they used to be. This means that the domain name is not as important as the meta-tags embedded in your website.

Add in the fact that the number of top-level domains are expanding beyond the original .com and now include .net and .org amongst others, with almost equal prestige, and those .coms start to look less valuable.

The firm also point to a recent valuation they carried out of a domain name portfolio in connection with the sale of a business. It determined that the portfolio of 500 to 1,000 domains would have been worth about $3 million a decade ago, but their value today has fallen to less than $500,000.

One of the domain names acquired by Ostrofsky about ten years ago was mutualfunds.com, which he managed to buy from a Dallas mutual fund company for $150,000 after they had an argument with regulators.

It would not seem unreasonable that a domain name like mutualfunds.com would attract plenty of buyers at auction and the estimated sale price was set at between $2-$4 million, with a starting bid of $1 million.

Heritage Auctions hold regular live sales of domain names and they offered this valuable domain name amongst many others in one of its sales. Out of the 32 domains offered for sale prior to bids being invited for mutualfunds.com, only 13 found a buyer and this high-profile star attraction of the auction also failed to attract a bid that matched the starting price.

Public auctions are not the only way that domain names are sold of course, and you could definitely argue that many successful sales are conducted in private, so it could be misleading to cite a few examples of valuations not being reached and simply conclude that the market has lost its shine.

The same principles remain when it comes to successful domain name investing now as it did before, which is that you have to create demand and add value with a new site and be savvy with your purchases in the secondary market.

You can point to evidence of a decline in sales values when you look at publicly available figures and also suggest that the percentage of unsold domains through auction sites add weight to the conclusion that the goldrush is over.

The problem lies in the fact that you might be writing off an investment opportunity based on half of the information, as no one actually knows the strength and volume of private sales which are not disclosed.

The best evidence of a domain’s true value is what someone is willing to pay for it, and the fact that the domain king amongst other heavyweights, are still actively trading, probably suggests it may be premature to suggest that domain name investments have completely lost their shine.

Locking Away a Future Profit – Finding Affordable Cars that are set to become future classics


Emotions and investing are not good bedfellows as a general rule and becoming too attached to an asset you own, has the potential to cost in more ways than one at some point.

There must a good number of people who have at some point regretted selling a car that they cherished and even more galling is the added insult that their much-loved vehicle has now become a classic car and an appreciating asset for someone else.

The classic car market has been a real boom and bust story at times and developed the equivalent of a rotten floor pan in the early 1990’s, with prices falling through the floor and dropping from previous highs by as much as 40% in some cases.

The bubble bursting fall in classic car prices was supposed to be a salutary lesson for investors that cars are just a commodity and should be viewed accordingly when considering their investment potential.

This is easier said than done when you get your first sight of a car made by someone like Ferrari or Lamborghini and suddenly they seem like a great buy, if you have some cash to splash.

The fact of the matter is that some classic car prices have actually been recovering quite impressively since that early 1990’s collapse in the market. According to a study carried out by the private bankers Coutts, they found that certain classic models have risen by over 250% between 2005 and 2013.

Classic car valuation experts Hagerty produce a number of indespensible collector car indexes, which allow you to see clearly what is happening to prices in the U.S and around the globe.

Their indexes show that even if you are not in the market for a high-end classic car like an F40 or a Lamborghini Miura, if you invested in an affordable classic, which are collectible cars priced at under $30,000, you would have likely experienced better growth in values than those investors who concentrated on the top tier of classic car speculation.

Hagerty’s Affordable Classics Index has risen by 7% in 2015 alone, so you clearly don’t have to spend vast sums of money to turn a decent profit if you buy wisely with your head leading your heart, as far as that is possible when the subject is cars from our youth.

The sentimentality aspect is definitely still a strong factor in the classic car market and if you can combine the pleasure of buying a car that you have long admired or perhaps even used to own, and also make money on it as an investment, that is quite an attractive proposition.

As this data illustrates, classic cars overall have outperformed gold and the FTSE 100 since 2009, and some of the the ten top performing cars have been been able to generate returns of over 200%, which are figures that many fund managers can only dream about.

Screen Shot 2015-05-21 at 08.54.19

The question being asked is are we heading for another classic car bubble, or is there an opportunity to add some classics to your garage as a viable alternative investment strategy?

Some industry observers believe that this time the price rises might be more sustainable as we are not looking at a bubble financed by borrowing. Instead, people are spending hard cash from savings and pension pots. Add in growing interest from emerging markets such as India there are potentially more buyers after the same number of cars than ever before, which should help to sustain valuations.

Advice from the experts

The best advice when it comes to buying a classic car is to buy the best model that you can find for the budget that you have available.

Some people who bought with their heart rather than their head have still managed to make money but nothing beats doing plenty of research in terms of values and other aspects that affect values.

Classic car valuations are very sensitive to things like appearance, scarcity value, history and condition of the vehicle and image. How it is perceived as a desirable vehicle or a design classic can make a fair difference to prices.

Other things to consider are the mechanical profile of the car in question and whether it has any known issues and also whether it is considered to be a good car to drive. The more boxes you can tick, the greater your chance of making a potentially viable investment, but there are definitely no guarantees in that respect.

Rather like collecting art, it often works well to buy a car that you really want to own and then view any subsequent rise in value as a bonus. That may seem to be conflicting advice, but at least if you are prepared to adopt that approach, you can keep expectations in check and it might even help with your tax situation as well. This is because in the UK, if you drive the car it will be exempt from Capital Gains Tax whereas a car bought purely for investment purposes will be taxed accordingly.

Winners in the last five years

The art of classic car investing is spotting trends with certain models early enough to be able to enjoy the ride as prices start to react positively to a rise in popularity.

Here are some of the classic cars that have turned out to be winning investments over the last five years, which will give you an idea of the potential and could be helpful in working out what cars and models might develop into future classics, based on what has been successful most recently.

Screen Shot 2015-05-21 at 08.55.50The Lotus Cortina is a great example of a classic car investment that can deliver surprisingly good returns for a relatively modest capital spend.

If you had bought this car in 2009, it would have cost you £20,000 and today it commands a price tag of £60,000.

The porsche 911S was produced between 1967-1973 and positively encouraged drivers to lean heavily with their right foot. This 911S cost £34,750 in 2009 and the price has accelerated to £100,000 today.

Screen Shot 2015-05-21 at 08.56.35The BMW 503 Coupe, which was produced between 1956 and 1960, is a good example of how a model can become more popular as a collectible classic than when it was in the showrooms.

The Coupe was an expensive luxury car that appealed to a limited market at the time. Now seen as a design classic by collectors, an outlay of £60,000 for this model in 2009, would see you get closer to £130,000 if you decided to sell.

Classics of the future

Having seen some of the success stories of the past, if you are considering a reasonably modest investment in the classic car market, the big question is which affordable cars might become the classics of the future and deliver potentially stellar returns?

Cars that carried a high price in the first place, tend to grab the headlines when it comes to classic car sale prices, but you don’t have to have a budget big enough to buy a Ferrari in order to invest in a car that could become a future classic and rise in value as a result.

Some fairly standard models from the 80’s and 90’s have a good chance of achieving classic status because they have the chance of attracting sentimental investors who are keen to seize the opportunity to return to their youth and get behind the wheel of a car they perhaps used to own.

This is why a car like the Citroen XM is considered a good candidate for future classic car status.

The fact that the Citroen DS and CX have now become classics in their right means that it doesn’t require a large leap of imagination to consider that the XM will follow suit.

You should be able to buy an XM for between £1,000 to £3,000, which represents a much lower risk than gambling a large chunk of your cash on a badge that comes with a much bigger price tag.

Another potentially profitable strategy is to try and spot cars that are design classics but have yet to achieve true recognition as a classic car.

Screen Shot 2015-05-21 at 08.58.27The Audi TT is a good example of this. You can acquire an original TT for somewhere between £2,000 and £8,000 at the moment, but some motoring experts believe that these prices could rise when the market awards it classic car status.

Scarcity is another reason why some seemingly modest models can appreciate in value. The Subaru Impreza Turbo was popular with motorists when it first came out but early models are becoming harder to find, which is already leading to values rising.

Many British men of a certain age may well have owned a Ford Capri at some point in their driving history and this model is a perfect illustration of how even a high volume production-line car can enjoy a rise in value, long after depreciation was supposed to have rendered their value to junk value.

Prices of Capri’s have virtually doubled in the last 18 months and they still seem to be rising.

There are any number of affordable cars that could become future classics and buying a model that you might have driven in your earlier days, is not a bad starting point for enjoying the chance to bring back some memories and also potentially profit as values rise in the future.

It seems that you can put a price on nostalgia, but that is not the only reason to consider classic cars as viable alternative investment, although you always need to be mindful of the potential for huge volatility in prices, if market conditions or sentiment changes.

Why silver seems set for a shiny future


If you take a look at this chart published by Kitco Metals Inc, which shows the price of silver over a 20 year period from 1985 to 2015, you may well draw the conclusion that most investors who have been exposed to the metal for this period of time, might feel slightly underwhelmed by what they have achieved in terms of returns.

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The problem with statistics as we are so often told by someone quoting that notorious saying that “there are three ways not to tell the truth, lies, damned lies and statistics” , is that the information can be used to support conclusions that may not truly represent the real position.

There is no disputing that the price of silver enjoyed a bull run and according to prices, the party’s over. But what the silver price isn’t really telling you just yet, is how strong industrial demand is right now and how it is expected to grow in the future.

What drives prices?

The price of silver in recent years and its steep rise over a two year period which is demonstrated in the chart, has almost exclusively been driven by investment factors and monetary demands rather than as a reflection of strong industrial demand.

If you delve into the past and take a seventy year period starting from 1900, the industrial and technological revolutions that took place during this time in our history led to a four-fold increase in demand for silver, rising from 100 million ounces to 400 million ounces.

Silver was considered the go-to metal and found uses in a wide range of new inventions and products that became consumer essentials. You can find examples of silver being used in an industrial capacity for things as diverse as plumbing, cars and electricity generation.

Fast-forward to the present day and industrial demand for silver is somewhere between 500-700 million ounces, compared to 400 million ounces in the 1970’s. This is the point in the story of silver in an industrial capacity starts to get very interesting, as far as some investors are concerned.

Whole new industries have been created such as solar energy, which uses silver paste in a very high percentage of crystalline silicon photovoltaic cells and the electronics industry is a heavy user of silver in many of its manufacturing processes.

Due to the wide use of silver in industrial applications and the fact that the list of uses is growing as developments continue in areas like nanotechnology, some experts believe there is a possibility to add a further 80 to 10 million ounces of silver demand to existing figures.

If that is the case and above-ground silver stockpiles become depleted, there is certainly a case to be made for suggesting that the price of silver will react accordingly.

Present and future uses

To get a feel of how accurate these predictions of a significant rise in demand for silver actually are, it is worth taking a look at how integral silver is in our daily lives as consumers.

This table published by the Silver Institute details the levels of supply and demand over the last decade and which industries and sectors are demonstrating the largest volumes of usage.

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Silver is considered is widely considered to be a more versatile industrial metal than copper and every typical household is testament to that claim as you will find silver in your alarm clock, the power switch on your wall and it is found in your plumbing, water purifier, computer,cellular phone and even your iPad, amongst other things.

Many gadgets that we use on a daily basis need batteries and these batteries need silver for their cathode or negative side. Silver oxide cells are used in cameras, electronic kids toys and if you wear a hearing aid, that will also be using silver oxide cells, which are gaining increasing popularity as they are considered to be more environmentally-friendly than lithium-ion batteries.

An interesting future development, might be where we see silver replace copper for as the primary form of electricity wiring. Copper is widely used for this purpose currently, mainly because it is considerably cheaper than silver per ounce.

Whilst cost is obvious a key consideration, it is worth pointing out that silver is a far superior conductor of electricity and performs consistently well at virtually any temperature, which also makes it versatile.

Already in the U.S, HTS wiring is gaining credence and that is perfectly understandable when you discover that it is capable of carrying 140 times more current than its copper equivalent and is also believed that HTS wiring is also more resistant to power surges.

Improving our health

Another industrial application where silver is expected to an increasing level of demand, is water purification systems.

Developments in these systems now see silver being used as a viable and safer alternative to toxic chemicals like chlorine and bromine. Swimming pools and spas are now able to use silver ion canisters to spread a biocide blanket, which is able to help prevent the prospect of diseased water.

Nanotechnology is another interesting area of industrial development, and with regard to making food-processing cleaner and healthier, it is now possible to impregnate silver into plastic sheets as a way of ensuring that bacteria does not affect the food.

Why manufacturers favor silver

Engineers are strongly in favor of selecting silver as their metal of choice, simply because nothing else is able to offer the same electrical or thermal conductivity or reflectivity.

It is hard to argue with the observation that silver is virtually irreplaceable and a vital industrial component as we continue to develop more efficient electronic products and more people switch to solar power generation and therefore need the photo-voltaic panels which rely on silver.

The medical industry utilises silver as a biocide and as silver catalysts expedite the reactions needed in order to produce major industrial compounds like formaldehyde and ethylene oxide, it is very hard to envisage the demand for silver falling or finding a replacement.

This dependence on silver is entwined within many major industries and when you consider situations like the rapid growth in uptake of solar installations, the 40 million ounces of silver used in the production of photovoltaic panels in 2013, is a figure that will be dwarfed in future years if the expected surge in demand continues.

The big picture

The Silver Institute publishes its annual Outlook for New Electronic and Electrical Uses of Silver and it predicts that we will witness 6% growth in demand in 2015 and the same in 2016, which equates to an additional 14 million of ounces of additional annual demand.

Some analysts also believe that growth in other industrial applications could easily add a similar amount of demand, which means that overall growth in industrial demand has a fair chance of outpacing GDP growth by some margin, if the estimates are reasonably accurate.

When looking at silver as an investment, simply reviewing its role as a monetary metal and basing your decision on whether to add some exposure to your portfolio on that basis, is not looking at the bigger picture.

Silver investors definitely need to factor a growing number of industrial applications into the equation, and if we get to a point where demand is starting to threaten a potential supply shortage, that could potentially have a profound effect on an asset which is also popular not just from an industrial perspective, but also to millions of retail investors who use silver as an investment hedge.

This is in no way a prediction that silver prices are going to rocket anytime soon but when you consider the level of panic induced by a fear of a palladium shortage in 2000, the market response would be very interesting to note.

Palladium is an industrial metal relatively low investor interest when compared to silver, but when the Ford Motor Company feared a shortage as a result of supply disruptions in Russia, the price of palladium tripled in a very short space of time.

If a similar scenario occurred with silver, it is not beyonds the realms of reasonable thinking to suggest that we could witness a far greater price spike, especially when you consider the prominent role silver plays in industry.

Even if supply continues to keep up with demand, it is still possible to construct a reasonable argument that silver is set to enjoy a shiny future when you consider the increasing levels of industrial demand and the introduction of new technologies that make use of the metal.

Germans Stockpile Gold for Fear of Greek Default – is now a good time to buy?


There are plenty of professional investors who advocate investing in gold as part of your overall portfolio, so that you can enjoy long term gains and be there when political and economic uncertainties send the price of gold higher.

History offers us a number of solid examples where gold has become highly sought-after in times of stock market turbulence and there seems to be a point arriving at the present time where the price of gold might enjoy an upward surge.

Regular tales of woe relating to Greece and the fear that they are likely to default and send the rest of the eurozone into a panic, can be found in the media on a daily basis, which is inspiring some investors to buy gold coins and bars as a hedge against the expected backlash if Grexit becomes a reality.

Germans leading way

Putting aside the political tensions that exist between Greece and Germany, it seems that German investors are more convinced than the rest of us that a Greek default could bring down the eurozone.

Figures published by the world Gold Council for the first quarter of 2015 revealed that German investors in particular, are leading the way in gold buying. They increased their level of buying gold coins and bullion by 20% in the first three months of 2015 to 32.2 tonnes, which is the highest rate of buying witnessed in the last 12 months.

Not the only ones

It is probably not a case of German investors knowing something that the rest of Europe doesn’t, as an increase in buying levels was widely seen across the rest of eurozone.

The World Gold Council indicated that the first quarter of 2015 has seen the strongest levels of demand for gold coins and bars at the start of a year, since 2011.

There is little doubt that German investors are definitely concerned over a range of issues such as the ECB, Greece and also Ukraine, which is prompting them to stockpile a bit more gold than usual.

Many investors consider gold to be a safe-haven asset, so the strong buying of gold across Europe is clear evidence of a growing sense of unease and uncertainty over central bank policy and the tense standoff that we currently seeing between Athens and its nervous creditors.

The bigger picture

The headline question posed was when is a good time to invest in gold?

Some investors, especially those in Germany appear to think that time has arrived, but is it always that straightforward when it comes to getting the timing right?

If a Greek tragedy is avoided and the eurozone manages to find the right economic sticking plaster to hold everything together, it is likely that stock markets will react positively and the price of gold might fall back slightly.

Trying to find a smart entry point to benefit from a spike in gold prices is certainly possible if your investment coincides with pivotal news that causes a reaction in financial markets, but despite the obvious turmoil and anxiety created by the Greek situation, many investors who take a long term view for their gold holdings, will not fret either way.

Asia still dominates the gold market

The fact that China and India accounted for 54% of consumer demand for gold in the first quarter of 2015, demonstrates that despite higher demand from European investors, Asia still dominates the gold market.

Interestingly, the reason put forward for recent strong demand in this part of the world, is the fact that uncertainty is growing that the China credit bubble is inflating to such a point that the financial markets will soon realise that the country will be unable to sustain such rapid rates of economic growth.

Still lower gold demand despite fears

All the talk of Grexit and the economic bubble bursting in China would seem to be strong signals that it might be a good time to get into gold.

Despite these two specific scenarios ramping up levels of angst amongst investors around the globe, in value terms, demand for gold is actually lower in the first quarter of 2015 than it was for the same period 12 months ago.

Although this seems to contradict the strong volumes reported earlier in the article, the important point to note is that the average gold price is 6% lower than for the same three-month period last year, meaning that the £26.6 billion of sales, is actually 7% less in monetary terms than 2014.

What all this means to investors is that the global gold market’s ecosystem is functioning as it should do and simply demonstrates that  gold continues to hold a unique relationship with investors and continues to demonstrate an ability to rebalance over time, regardless of what economic tragedies have played out in the interim period.

The behaviour of gold prices over the last 100 years would tend to suggest that for the long term investor, there is no specific smart entry point to look out for, although a historical perspective of how markets react to bad news, would suggest that the gold price will react in the short term if the Greeks hold their hands up and say they can’t pay.

How Musicians and Investors are able to Sing from the Same Hymn Sheet


Music royalties as an alternative investment are proving increasingly popular and there are definitely opportunities to generate a steady income, in much the same way as you would be able to do with dividends.

Longevity and other attractions

A standout reason for considering music royalties as part of your investment portfolio is longevity.

A song generates royalties for the life of the composer plus another 70 years, so if you manage to write a worldwide hit record, you would be smiling all the way into retirement every time you heard it played on the radio or when it was streamed via a service like Spotify.

If you are not musically talented enough to emulate the songwriting abilities of someone like Paul McCartney or even Slade (for UK fans) who top up their pension every Christmas with a certain song!, there are opportunities to share in this consistent and long running income stream by investing in back catalogs that come up for sale.

One of the other attractions attached to investing in music royalties is the range of options that you have available in how you put your cash into music.

Some artists choose to share a percentage of their royalties and this means that rather than acquiring the actual publishing rights, you can invest in a share of the royalty income generated for a fixed period of time such as 10 years.

This is attractive as an investment strategy because it can offer a defined and stable return for your money rather than fluctuating in the way that a stock market investment can do.

Digital opportunities

Some cautious investors may well take the opinion that the internet and digital music downloading is a considerable threat to royalty revenue generation as it is seemingly hard to police.

There may have been an argument for that opinion a few years ago when online streaming services first appeared on the radar but royalty collection companies have evolved and there is clear evidence that they are now able to make good use of these new distribution channels and even utilise them to gain an advantage.

BMI is one of the three United States performing rights organizations, along with ASCAP and SESAC, and BMI have reported that since 2011, it has been able to pay more money to songwriters, composers and music publishers than at any other time in its 70 year history.

Don’t fear the digital reaper is the message it seems, and if you are wondering what musical genre sells the best, here is a breakdown of the 2012 top ten in the U.S.

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Even Spotify, which a number of musicians boycott for fear of not being remunerated adequately for their songs, has been working hard to convince artists that it can make them money.

The music streaming service paid out $500 million in royalties to rights holders in 2013 and although they average song only generates what seems a fairly paltry $0.006 to $0.008 per stream in royalties, this can still add up to a decent number for successful artists. The biggest album on their site typically generates $400,000 in royalties and Spotify claim that a global rock star (who was not named) managed to generate $3 million in royalty payments for a 12 month period between August 2012 and July 2013, and all of these figures are expected to grow as the popularity of the site increases.

Up for sale

Musicians often have good reasons for wanting to raise some cash, such as funding a new project, so the quickest and easiest way of doing this is to offer a share of the royalties they currently receive.

There are a good number of websites that now offer the ability to buy and sell royalties which effectively work as music exchange platforms.

One example of this is the Royalty Exchange, which aims to match investors with royalty owners who are looking to earn some cash by selling all sorts of royalties such as music, but also including film, TV, books and almost anything that is considered intellectual property.

You register to bid for royalties that are being auctioned and this allows the winning bidder to buy songs for a set period of time, dependent on what the original creator is prepared to relinquish.

Expect to pay a premium. The Royalty Exchange charges a 2.5% buyer premium and a further 2.5% for the management and payout of your royalty stream.

Two different royalty streams

Michael Jackson famously acquired the Beatles catalog, which was quite a coup and he bought the publishing ownership rights.

This is one of two different royalty streams that are potentially available to investors. The other is more common and accessible, which is called Writers Share.

Writers Share is the income that a songwriter receives and is the royalty percentage received by the songwriter for individual songs or a catalog.

The fundamental difference between the two is that with publishing you have greater control whereas you don’t have those same powers under Writers Share.

Publishing does allow you a greater level of flexibility to be able to generate new streams of income for the songs that you own but be warned, increasing the level of income from a legacy catalog you have acquired is not always that easy.

You will find that the majority of catalogs that are being auctioned are legacy ones, which means that they are going to be over 10 years old. This often means that the income stream is fairly predictable and defined, and that is often attractive to investors who just want to tap into a Writers Share and be reasonably assured that the music they have invested in will continue to generate steady royalties each year without you having to do any promotional work because you are not the publisher.

Pros and cons

The positive aspect about music royalties as an alternative investment is that it can be a relatively low-risk investment strategy (no investment strategy is entirely without risk) and the basic principle of investing in music royalties is that it offers the chance to generate some annual income from your investment rather than providing growth on your capital.

If you are looking to make a quick buck, music royalties is probably not going to deliver on those aspirations.

The amount you can make from royalties is more slow and steady rather than generating big returns and there is always the chance certain songs or singers lose their audience over time, which means that if you don’t pick carefully, you might end up making less money than you envisaged.

What a healthy royalty stream should look like

This graph produced by royaltyinsider.com provides a great illustration of what you should be looking for when trying to identify a potentially profitable song title that is going to provide you with a healthy royalty stream.

A spike in revenue when the song is first released and then a gradual decline in sales over the next couple of years until it levels off and then produces a regular and fairly predictable return over the the next 10 years.

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Music usage will determine the royalties that are paid and although tracked user data that is collected and available for every song is not publicly available, it should be made available to an investor when the royalty is being offered for sale.

Working out how the music is used will help you to evaluate what the royalty stream in the future is likely to be.

It could be that the song in question is being used in a regular TV show or advertisement or is a popular hit with streaming services like Spotify. Working out who is playing the music and where it is being aired helps you to get an idea of its commercial value and ability to generate an income for you.

Crunching the numbers

To get an idea of the potential returns, it helps to look at some past auctions handled by The Royalty Exchange and see what the numbers look like.

There were were 37 bidders for the music of Reggie Hamm under a Writers Share arrangement and the winning bid was $28,500 for a 4 year term. This has generated $15,430 in royalties over the last 12 months and the expected investment return is estimated to be $42,100 in total.

Buying into Tommy Coster’s BMI Songwriters Share would have cost you $80,000 for a 2.25 year term and with $57,247 generated in the last 12 months, the successful investor is on track to achieve an investment return of $97,500.

Not all royalty investment are so successful as like anything, there are always going to be winners and losers, but musicians have loyal fan bases, and loyalties lead to royalties.

Investing in Film Production – For Movie Fans only, or for Serious Investors too?


People are attracted to investing in films because it is considered to be an exciting opportunity to get involved with and there is the potential that you might be able to share in a big box office success.

It is obviously an alternative investment strategy that is clearly fraught with dangers and comes with a serious wealth warning, although there are certain ways that you can reduce your risk to a certain extent and there are also potential tax incentives depending on your financial circumstances and tax position.

Winners and losers

For every stellar success story that you can find regarding a film that exceeded all expectations at the box office and earned investors a small fortune, you can just as easily find examples of investments that turned sour.

A good example of how even star names cannot rescue a film that fails to wow the critics and audiences, would be a movie called Gigli, which starred Ben Affleck and Jennifer Lopez. It grossed $4m in the critical opening weekend of release and was headed for the DVD shelves only three weeks later, making it one of the shortest runs for a Hollywood production in history and creating a net loss of just under $67,000.

If that is a story that chills the blood of investors, the flip side offers some tantalisingly big numbers and stellar returns for investors when you invest in a film that proves to be a big hit with cinemagoers.

Winning film investment examples include the 2009 movie The Hangover, which may have cost $35 million to make, but managed to earn an impressive $221 million after deducting production costs.

Another classic example would be The Blair Witch Project, which cost a miserly $300,000 to make but ended up raking in an incredible $141 million, which is a pretty impressive return in any investor’s eyes.

This is the fundamental aspect of investing in films. It can very often be a feast or famine scenario but investors are often keen to get involved not just because of the glamour attached to investing in a hit movie, but due to the fact that the upside potential can be huge and compares very favorably to other investments like real estate, if you manage to back a winner.

Successful formula

If you were to compare the success rate of independent filmmakers and the major Hollywood studios, you would undoubtedly see more failures that never even make it to the cinema or anywhere close to it, with independents on lower budgets, whereas Hollywood productions are probably more statistically likely to at least get finished.

Some financial analysts who have knowledge of this field of investing tend to focus either exclusively on Hollywood studios for their private equity investor clients or at least use a proven criteria to help reduce the investment risk as much as possible.

When consider an investment they will look at aspects such as the caliber of the film director appointed, genre and whether the leading actor is male or female. It is also important to establish the type of contract that has been granted to the star names. This is because big names will help draw a bigger audience but that can come at a price, which means they might be entitled to be paid first out of box office receipts, which will potentially diminish the level of ROI for investors.

The big problem with this particular strategy is that Hollywood hasn’t really needed your money as a rule, and all the major studios and their parent companies have historically been able to raise finance through revenue generated from previous successes and lucrative licensing deals.

The fact that larger movie productions cost upward of $100 million and the financial climate has been tougher, now means that there are now some opportunities for private investors to get involved, but this is often through private investment pools or funds that finance a group of films rather than just the one project in particular.

The same rules of investing apply even when it comes to Hollywood ventures, aim to invest in a portfolio of films to spread your risk rather than pinning your hopes on just one production. The chances are that there is a likelihood that you will invest some of your cash in a few movies that bomb, whilst trying to find the one film that hits the investment jackpot.

Investment options

You will be able to find opportunities to invest in funds that finance a group of films and there are also funds that seek investment in order to invest in a diverse portfolio that covers not just films but television and special projects which are considered to have merchandising potential.

Other investment vehicles take the deliberate decision not to compete with Hollywood and therefore focus their attention on things like low budget thrillers, action and science fiction movies, that would otherwise be known as a B-movies.

These films are often considered more marketable and can produce a surprisingly good return sometimes, when the movie attracts a cult following and becomes more widely distributed.

Tax advantages and entry requirements

Some of these investment options operate as an Absolute Return Tax Advantage Fund and this is due to the fact that when it comes to U.S tax laws, it utilizes federal, state and international tax credits in order to offset risk.

In the UK for example, investors are also able to take advantage of tax driven schemes and UK film tax credit systems to help reduce the level of risk to their capital. This can be done through a government-backed Seed Enterprise Investment Scheme (SEIS) or an Enterprise Investment Scheme (EIS).

Qualified investors could get up to £100,000 tax relief using SEIS and up to £1 million via EIS and another attractive benefit is that there is no capital gains tax payable on profits after the a three year period has elapsed from when you acquired the shares.

Due to the high level of risk involved in these film investment schemes, there may be a minimum entry and liquidity criteria to adhere to.

In the US, you may be required to be able to afford a minimum buy-in as an individual investor and in order to invest in these sort of pools, the Securities and Exchange Commission will typically stipulate that you should have a net worth of at least $1 million or an annual income of at least$200,000.

You should seek to clarify your tax position and whether you are eligible for any tax relief rather than rely on any information given here, which is for guidance purposes only.

The importance of due diligence

Standard investment advice is to always practice due diligence and that is definitely the case when you are considering investing in a movie project.

This type of investment is not considered suitable for those who do not have an appetite for risk or do not fully comprehend the level of exposure and risk to their capital that they may be facing if the venture is not successful.

Make sure that you take particular note of how any proceeds from the film are distributed and clarify whether the split of money is even between the producer and investors. It is common for the film stars, writer and director to be paid from the producers profits and all of these investment proposals need to be in writing and should be verified independently.

The key is to be able to have transparency and that means being able to know exactly where your investment is going and how it is intended to be repaid along with any profits if the movie is successful and makes a positive return.

Independent film production is prospering

if you take a look at figures for UK film production investment in 2014, the amount invested was £1.075 billion, which is rise of 14% and this combined with the fact that UK cinemas took more than £1 billion at the box office for the third year running, shows that there are opportunities to invest successfully in movies.

The existence of film tax relief is believed to play a pivotal role in attracting international productions to the UK and this has also resulted in more than £275 million being invested in domestic television productions.

If you look at the league table for the top independent UK films released in the UK during 2013, it shows that Philomena managed to gross £10.79 million and all of the films down to 16th place, managed to achieve gross box office receipts in excess of £1 million.

These might seem like small numbers compared to Hollywood blockbuster box office figures but that does not mean that they are not able to turn a profit, as everything is in proportion and therefore the amount of capital invested is lower.

Someone who is looking to invest even somewhere in the region of $1 to $2 million is still not going to be able to invest in a major movie production, which means that they will often be looking at the independent film productions to try and make  a return on their investment.

Understanding the risks

A study published through the Leonard Stern School of Business sought to analyze the ROI of independently financed films and posed the question of whether there were more slumdogs than millionaires to be found.

Although the paper was published in 2010, it does still have relevance as the structuring of investment deals has not changed significantly in the interim period.

The study looked at the cash ROI for 990 independently financed films and the bottom line was that 45% of these films managed to generate a positive return and 25% of them managed to double their money.

If you look at the cash flow of a film over 10 years from initial investment, so that you can accumulate revenue from DVD sales etc, the average return equates to a yearly ROI of 7.18%.

It also illustrates what a typical revenue waterfall looks like for a movie production which is shown below.

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In addition to understanding how many film financing deals are structured it is also very important to try and protect yourself against the possibility of the film never actually being completed.

There are numerous ways to make money from investing in film productions directly or through various schemes but you can only do this if the film gets finished. One precaution you should always try to insist on or at least verify its existence, is a completion bond.

This is an insurance policy that provides a safety net to ensure that a film is finished on time and on budget. Buying rights to a film before theatrical release needs to be safeguarded through a completion bond .

There are actually opportunities to invest later in the film’s production cycle. Some investments seek funding to finish a film or pay for marketing costs and these deals can attract an interest rate as high as 20% with the prospect of a quick repayment, but this strategy also has obvious risks attached.

Deciding to invest

The general advice when considering films as a viable alternative investment is to only invest money you can afford to lose and spread your risk by investing in several projects rather than banking on just one making you a return.

The film industry and consumer spending on entertainment is proving to be remarkably resilient regardless of the prevailing economic conditions, so there are ways to profit when you invest, but caution and diligence should play a starring role in your investment mindset.

Serious Investors know that Gold is not just a Fair-Weather Friend


A fair-weather friend is someone who is pleasant and profitable but who will turn against you or walk away at the first sign of trouble.

We might all know someone who is a bit like that in our circle of friends but as serious investors know, that analogy is not an accusation you can throw at our long-term trading partner, gold.

In it for the long-haul

It is hard to argue that the price of gold is often a fair barometer of market sentiment and often reflects the level of risk appetite that a lot of investors have at a certain point in time.

This chart produced by Macrotrends shows the performance of gold against the performance of the NASDAQ, Oil and the FHFA Housing Index and provides a fair illustration of why so many experienced and savvy investors consider it essential to have exposure to gold in their investment portfolio.


If you had added gold to your portfolio 36 years ago, the value of your retirement fund that is invested in gold, would have increased by 1737% overall and by 322% over the last 15 years.

There is no point denying that the price of gold has taken a downward turn in the last couple of years, mainly due to the fact that the stock market has enjoyed a healthy injection of cash from the Federal Reserve and an upturn in the economic outlook.

Wrong call

The pressure on gold prices has seen some analysts suggest that the Midas Metal has had its time in the sun and that the precious metal will stay out of favor.

Any investor with a long-term memory or an understanding of how market cycles in all stocks and commodities can quickly change, will see that the predicted demise of gold would be the wrong call to make.

Strong demand

There is plenty of evidence to demonstrate that the demand for gold has definitely not gone away and there are plenty of international investors with a strong appetite for buying gold at prices that may look cheap if history is anything to go by.

Historic trends – new buyers

It is important to pay attention to what is probably the leading story relating to gold over the last decade, the migration of gold from West to East.

Investors in China and India have a long-held passion and cultural tradition that involves the continual acquisition of gold. Sales of coins and bullion have increased by over 20% in China and over 50% in India when prices were low.

There is also a very interesting historic trend that makes the surge in demand even more interesting from an investment point of view.

Jim Willie is a respected gold analyst, and aside from noting that gold and international power continue to go hand in hand, he also notes that gold’s movements are very much in line with historic trends.

The fact that the gold price is still on-track within the usual performance cycle does tend to put the bearish comments about the future of gold prices, into question.

Market manipulation

The first important point to note when considering the case for gold, is the effect that central bank policies have on determining stock price movements.

Now that the Fed has finished pumping money into the financial system, adding $3.5 trillion to the balance sheet according to a Bloomberg report, and the dollar has strengthened in response, this is perceived as bad news for gold prices.

Sense of perspective

Gold had been on a 12-year bull run up until the last quarter of 2013 and a 36% fall from peak prices might have some nervous investors pressing the sell button and heading for the exits.

A sense of perspective is needed, especially in turbulent times where there is market volatility and a reminder of the fair-weather friend analogy would be good.

The price of gold gained 660% between 2001 and 2011, which makes the 36% drop seem like a bump in the road rather than a sign that gold has lost its shine, especially when you look at the long-term performance and enduring popularity of this precious metal.

Timing is everything

Buying into gold is no different to buying stocks, if you are looking for a quick return and timing is everything in that scenario.

If you had joined the gold bull market even up until the middle of 2010 you would have still come out on top, despite recent falls but after 2010, you may have had to make do with a break-even or loss situation.

Having gold in your investment portfolio and staying in the game for the long-haul, is a strategy that has been utilised by many successful investors who consider that holding a percentage of gold, provides them with a good hedge against market volatility and also provides long-term growth on their investment.

Some of these same savvy investors have viewed the recent drop in gold prices as an excellent opportunity, as they say, timing is everything.

Predictable cycles

It is amazing when you consider how prices can fluctuate, that gold tends to work in 8-year cycles, and this is playing out this time round as well, despite unprecedented levels of central bank financial stimulus, applying pressure to prices at certain times.

A historical overview demonstrates that gold prices consistently hit a low price area every 8 years before recovering. There are also often significant spikes in the price in-between the low points and during bull market runs, gold often stays above the high reached before the 8-year low point is hit.

These predictable cycles help make a case that gold can often get oversold at certain times, but it is highly likely to reward you for your patience if you take the professional investors view, which is always a medium to long-term outlook for best returns, rather than trying to predict short-term movements.

Many reasons to hold gold

[quote_left]”Investors should maintain a 10% exposure to gold in their portfolio and within that weighting, 5% should be in gold bullion and 5% should be in gold stocks.”- Frank Holmes, Chief Investment Officer of U.S Global Investors.[/quote_left]

As an Investopedia article outlines with 8 reasons why you should own gold, there are solid arguments that support the favorable opinions and plenty of justification for holding gold as part of your overall investment strategy.

It is quite clear that the price of gold can be volatile in the short term, history has shown that it has maintained and increased its value over a longer period and serves as an excellent hedge against inflation and the erosion of major currencies.

Frank Holmes, Chief Investment Officer of U.S Global Investors, describes demand for gold as “fear trade” and “love trade”. Very simply, this when investors buy gold coins or jewelry out fear of worsening economic indicators or buy gold simply because they have an enduring love for the metal.

Either way, it can be a win-win situation for gold investors who can profit from both of these scenarios that will drive prices up in response to demand.

4 ways to invest in gold

There are four main ways to invest in gold and here is a look at all of them and what they offer to investors.

1) Gold Bullion – we recommend BullionVault

Holding physical gold is a strategy that ensures the value of your asset will move directly in unison with spot gold pricing.

You need to factor in storage costs to your purchasing decision but with a dealer like BullionVault insurance and storage is just 0.12% per annum for gold. This is less than a third of the normal 0.4% charged as an annual management fee by most ETFs.

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2) Gold CFDs – we recommend Plus500 get a £20 signup bonus

A CFD or “contract for difference” is an agreement between two parties to exchange the difference between the opening price and closing price of a contract. In this case it allows you to speculate on the price of gold increasing or decreasing.

Please remember that CFDs are a leveraged product and can result in the loss of your entire deposit.

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3) Gold Stocks

Another way of investing in gold is to buy shares in gold miner stocks.

You will often find that gold miner stocks will mirror spot gold prices and are often used as a leveraged play on the underlying commodity. It goes without saying that you will need to research each company before you invest and take some professional investing advice if you are not sure.

4) Exchange-traded funds

ETF’s have enjoyed a surge in popularity with investors who are looking for exposure to gold and this is mainly due to the fact that the structure of ETF’s minimizes your costs and eliminates any problems related to physical storage of gold.

There are a good number of ETF’s to choose from on a global basis and they offer you the choice of physically-backed funds and products designed to achieve exposure through gold future contracts.

In addition to these, there are several ETF’s available for investment, which specifically offer you the opportunity to invest in the stocks of companies which are directly engaged in the gold extraction process.

The reason why these ETF’s offer you exposure to these companies and can be considered by experience investors as a worthwhile risk-reward strategy, is that their profitability is dependent on prevailing market prices, which means there will sometimes be considerable volatility in price movements.