How to Invest in Weird Stuff Uncorrelated to the Stock Market
Stocks are no longer the only liquid interesting investments out there. Here's some interesting things one can consider diversifying into that aren't necessarily correlated to markets or inflation (although they might be - some of these are hedges against inflation).
Why weren't these always investable? It's because "fractional ownership" is somewhat of a new thing (in terms of public access). That means you can buy a tiny fraction of a famous painting , for instance. A painting that one would otherwise not be able to afford.
1. Fine Art
Check out masterworks.io. They offer fractional ownership of famous and expensive paintings.
The image below shows the appreciation of the top fine art vs the S&P 500. So does it cost $20,000,000 to buy a top painting? Historically, Fine Art has appreciated 14% per year.
Now, you can buy a piece of a $19,000,000 Banksy painting for $10,000. This way, people don't have to speculate on newer, cheaper (and much riskier) artists, to participate in this market.
2. Music Licensing Rights
I would imagine this is totally uncorrelated to the market. When a musician is just starting, a record label takes a big chance investing in their first album. The label keeps 80% of the revenues then (the price for taking that risk) and the artist keeps 20%.
Then, for the rest of the song's life, it generates money when it's played in concerts, on the radio, albums are sold, songs are sold, songs are used in movies, etc.
So after an artist breaks out, the regular public can now invest in fractional licensing of the royalty streams on a song.
One site, royalty exchange, has the following artists music rights for sale
What's the return? If you bet on the right artists, you can make 100s of %.
Classic aging wines go up in value. You can invest fractionally in specific bottles and diversify all across the world.
4. Baseball Cards and other sports memorabilia.
Imagine buying 1/1,000,000th of a 1952 $12 million Mickey Mantle card (up 96%) and betting on it gaining value.
At rares you can buy fractional shares of the top sneakers. Do they return well? Check it out.
7. Classic video games.
Here's an example I read about on alts.co:
"This week continues the Heritage January Signature Games auction.
These are the games we’re watching:
John Madden Football WATA 9.2 A+ for Sega Genesis – this was the first console game featuring the recently late coaching and announcing legend. At the time of writing (1/4/22), it’s already up to $63k, surely bolstered by the man’s recent passing. This specific cartridge is from the offices of John Madden himself. Update – at $69k with 17 days to go"
8. Hot Wheels
You can makes 1000s of % if you know what you are doing buying and selling Hot Wheels.
Here's an article about it: https://alts.co/hot-wheels-collecting-with-bruce-pascal/
9. James Joyce
Original Ulysses edition, signed by Matisse. You can buy shares for $58. Market cap: $29,000
10. Why do these alternatives often make money.
First you have to do the right research.
And there are fewer investors than investors in public companies. So there are greater opportunities for arbitrage.